Working capital is a measure of assessing the operating liquidity of a business. It is also called the net working capital. Basically, it is the amount of net liquid funds that is required to run the business operations smoothly. Higher net working capital means the company has enough resources to pay off its current liabilities. The net working capital is also used to assess the liquidity of a company.
The higher the current assets as compared to current liabilities, the better the company’s liquidity will be.
Net working capital = Inventories + cash + accounts receivables – accounts payables
The bond indenture for the 10-year, 9% debenture
Data pertaining to the current position of Forte Company follow:
Schwert Corp. shows the following information on its 2012 income statement
Aguilera Acoustics, Inc. (AAI), projects unit sales for
Fair-to-Midland Manufacturing, Inc., (FMM)
To solve the bid price problem presented in the text,
Jon Fulkerson has also received a credit application from Seether, LLC
Consider the following abbreviated financial statements for Weston Enterprises:
Forecast KMS’s free cash flows (reproduce Table 18.13),
In our capital budgeting examples, we assumed that a firm would