JAMIE GORTE – POST PLEASE REPLY UNDER EACH STUDENT POST
1. Define working capital, net working capital and working capital
management. Working capital can be defined by a formula of “working capital
= current assets – current liabilities” (Investopedia, 2018). The working
capital assists with being able to determine if the short-term assets will be
enough to also cover short term debt. Net working capital is like working
capital as it looks at the current assets minus the current liabilities. These
can include short tern expenses such as current expenses to operated and
accounts payable. Working capital management is the person(s) in charge of
making sure there is enough short-term capital to be able to pay the debts
while ensuring this is done in an efficient manner.
2. What is an internal control system? The internal control system is how an organization
plans and implements processes that reduce fraud and increase productivity. The controls
include the managers ethics and operating style and how they work with
staff and resolve issues (Finkler, S., p. 272). It is also imperative to have
competent employees, a good record keeping system and safeguards in
place to prevent unauthorized access or fraud.
3) Why are variances calculated? Variances should be calculated to determine
if there is a positive profit or a negative loss that will determine if an
investigation is needed. An example of this is when a department is losing
money, and this may result in layoffs to reduce costs.
References:
Finkler, Steven A., et al. Financial Management for Public, Health, and Not-for-Profit
Organizations. CQ Press, an Imprint of Sage Publications, Inc., 2017. (pp. 240-241, 272, 293-
295).
Investopedia. (2018). Working Capital. Retrieved from
https://www.investopedia.com/terms/w/workingcapital.asp
REPLY:
TASHAWN - POST
Define working capital, net working capital and working capital management.
Working capital is a measure of both a company's efficiency and its short-term financial health.
Working capital is calculated as Working Capital = Current Assets - Current Liabilities. Net
working capital is the aggregate amount of all current assets and current liabilities. It is used to
measure the short-term liquidity of a business, and can also be used to obtain a general
impression of the ability of company management to utilize assets in an efficient manner. To
calculate net working capital, use the following formula: Cash and cash equivalents, Marketable
investments, Trade accounts receivable, Inventory, Trade accounts payable=Net working capital.
Working capital is a measure of both a company's efficiency and its short-term financial health.
Working capital is calculated as: Working Capital = Current Assets - Current Liabilities.
1. Define working capital, net working capital and working capital
management. Working capital can be defined by a formula of “working capital
= current assets – current liabilities” (Investopedia, 2018). The working
capital assists with being able to determine if the short-term assets will be
enough to also cover short term debt. Net working capital is like working
capital as it looks at the current assets minus the current liabilities. These
can include short tern expenses such as current expenses to operated and
accounts payable. Working capital management is the person(s) in charge of
making sure there is enough short-term capital to be able to pay the debts
while ensuring this is done in an efficient manner.
2. What is an internal control system? The internal control system is how an organization
plans and implements processes that reduce fraud and increase productivity. The controls
include the managers ethics and operating style and how they work with
staff and resolve issues (Finkler, S., p. 272). It is also imperative to have
competent employees, a good record keeping system and safeguards in
place to prevent unauthorized access or fraud.
3) Why are variances calculated? Variances should be calculated to determine
if there is a positive profit or a negative loss that will determine if an
investigation is needed. An example of this is when a department is losing
money, and this may result in layoffs to reduce costs.
References:
Finkler, Steven A., et al. Financial Management for Public, Health, and Not-for-Profit
Organizations. CQ Press, an Imprint of Sage Publications, Inc., 2017. (pp. 240-241, 272, 293-
295).
Investopedia. (2018). Working Capital. Retrieved from
https://www.investopedia.com/terms/w/workingcapital.asp
REPLY:
TASHAWN - POST
Define working capital, net working capital and working capital management.
Working capital is a measure of both a company's efficiency and its short-term financial health.
Working capital is calculated as Working Capital = Current Assets - Current Liabilities. Net
working capital is the aggregate amount of all current assets and current liabilities. It is used to
measure the short-term liquidity of a business, and can also be used to obtain a general
impression of the ability of company management to utilize assets in an efficient manner. To
calculate net working capital, use the following formula: Cash and cash equivalents, Marketable
investments, Trade accounts receivable, Inventory, Trade accounts payable=Net working capital.
Working capital is a measure of both a company's efficiency and its short-term financial health.
Working capital is calculated as: Working Capital = Current Assets - Current Liabilities.
