What is a Working Capital?Working capital is the fuel for running businesses the companies. It may be stated that maintaining an adjusted amount of working capital is the first and foremost aim of business organizations. While having too much working capital is bad, an inadequate amount of working capital can ... Read More

What is a Working Capital?Both temporary and permanent working capital are necessary to run a business smoothly. Working capital acts as fuel in running business activities. While temporary working capital provides the expenses to meet general day-to-day needs, permanent working capital helps businesses meet larger demands in the future.As working ... Read More

What is an Operating Cycle?An operating cycle is the time needed to convert sales into cash after converting the resources into inventories. In fact, no company generates sales after the production of a good instantly. It has to wait for some time to sell the goods in the market after ... Read More

The major differences between Temporary and Permanent working capital are as follows −Based on NeedsTemporary and permanent working capital differ in terms of their need. The permanent working capital is a fixed amount of working capital that is kept fixed for the long-term needs of the business. The temporary working ... Read More

The operating cycle is the time required for converting sales into cash after converting resources into inventories. The operating cycle of a manufacturing firm is different from non-manufacturing companies because manufacturing companies need to resource raw materials and convert them into finished goods. While non-manufacturing companies can go directly from ... Read More

An operating cycle is the time needed to convert sales into cash after converting the resources into inventories. In fact, no company generates sales after the production of a good instantly. It has to wait for some time to sell the goods in the market after purchasing raw materials and ... Read More

What is Sustainable Growth?Sustainable growth is a percentage measure of yearly growth in sales that is in sync with the firm’s financial policies meaning no fresh equity is issued. For a multiproduct company, sustainable growth can be calculated by the company’s growth at the corporate level in terms of growth ... Read More

What is Operating Cycle?All companies need working capital to run its day-to-day activities. There is no business that does not need working capital. In order to reach its financial goals, however, different companies need different amounts of working capital. An operating cycle is the time needed to convert sales into ... Read More

What is Sustainable Growth?The main aim of financial planning is to get a balanced relationship between financial goals. It is based on the sustainable growth of a company given its established financial policies. As it is known, financial planning involves growth, investment, and financing. Therefore, to achieve sustainable growth, the ... Read More

Definition: Net Concept of Working CapitalThe net concept of working capital is a qualitative concept that focuses on the liquidity of funds that must be maintained in order to meet short-term liabilities. It is obvious that a company would need enough funds to meet the day-to-day needs of its operation, ... Read More