Working Capital Management (HSC SSCE Business Studies): Flashcards
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Practise the cards
10 cards from this deck
Working capital
Working capital
Funds available for short-term financial obligations
Net working capital formula
Net working capital formula
Current assets minus current liabilities
Current ratio formula
Current ratio formula
Current assets divided by current liabilities
Acceptable current ratio benchmark
Acceptable current ratio benchmark
2:1 or 200%
Current assets
Current assets
Resources convertible to cash within 12 months
Current liabilities
Current liabilities
Financial obligations settled within 12 months
Accounts receivable
Accounts receivable
Money owed to the business by customers
Accounts payable
Accounts payable
Money the business owes to suppliers
Leasing
Leasing
Paying to use equipment owned by another party
Sale and lease-back
Sale and lease-back
Selling an asset then leasing it back