Net Working Capital |
| < While it is always good to make investments in fixed assets, sometimes, it is necessary to invest in net working capital, a process that is widely known as change in net working capital. If you take a look at growing companies, you are more likely to see a positive change in net working capital (reflective of the growth) To summarize that again: Net working Capital = Current Assets - Current liabilities |
RELATED ARTICLES:
Working Capital productivity
We have seen in some of our previous postings that working capital is defined as a measure of a business' efficiency and its short-term financial health. In other words working capital can be determined by subtracting current liabilities from current assets. Another concept we w
Controlling cash flow problems
Cash flow refers to the way cash moves in and out of the business. In general, cash comes in when customers buy the products and services, and moves out of the business when you pay your debt to banks, suppliers and utility bills. As you can already see from this, a few things have an impact on your
Cash Flow
Cash flow is loosely defined as a measure of the business' ability to generate and spend money. This in the process determines the value of that business. Obviously a business with more cash outflow than cash inflow is a loosin
Cash flow valuation
Valuation is defined as the determination of the economic value of an asset or liability. Let us say that you are in a position to sell your property and on the first day, a potential buyer offers you 50 thousand dollars payable immediately. You figured that if you wait a littl
What the cash flow statement tell us
The cash flow statement is a financial document that shows how changes in balance sheet and income statements affect cash and cash equivalents. As an analytical tool, the cash flow statement is useful in determining the short-te