Cash and Working Capital Management
One of the important questions that a company must be able to answer relates to working capital.
The term "working capital" refers to a company's current assets, such as inventory, current liabilities, and accounts payable.
Working capital management is a daily task that must be carried out. By doing this, the company's management ensures that it has the necessary resources and funds to continue operations and prevent costly interruptions.
Working capital management involves several activities, all of which are related to the receipt and payment of cash.
Zarrin Taraz Golestan Financial and Accounting Services Company poses some of the questions related to working capital management as follows:
How much cash and inventory should the company hold?
Should the company offer credit sales or not?
How can we secure the funds needed in the short term?
For example, should we make purchases on credit or take a short-term loan and use it for cash purchases?If we intend to take a short-term loan, when and how should we do it?
These questions are just a small example of the inquiries that a financial services company raises during the working capital and cash management process.
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