Why is working capital management important? Give concrete examples of how companies manage their cash, receivables, inventory and payables.

Answers

Answer 1

Effective working capital management ensures that a company has sufficient funds to cover its short-term obligations and operate smoothly.

Liquidity: Proper management of working capital ensures that a company has enough cash and liquid assets to meet its short-term obligations, such as paying suppliers, employees, and other operating expenses. Insufficient working capital can lead to cash flow problems and jeopardize the company's operations.

Business Expansion: Adequate working capital allows businesses to seize growth opportunities, invest in new projects, or expand into new markets. It provides the necessary funds for capital expenditures, marketing campaigns, research and development, and other strategic initiatives.

Companies employ various strategies to manage their cash, receivables, inventory, and payables. Some examples include:

Cash Management: Companies can employ techniques like cash flow forecasting, cash pooling, and cash concentration to optimize cash balances, ensure sufficient liquidity, and minimize idle cash.

Receivables Management: Companies can implement credit policies, conduct credit checks, and use collection strategies to efficiently manage accounts receivable. They may offer incentives for early payment or utilize factoring services to convert receivables into immediate cash.

Inventory Management: Techniques like just-in-time (JIT) inventory, economic order quantity (EOQ), and safety stock optimization help companies minimize inventory holding costs, reduce stockouts, and improve working capital efficiency.

Payables Management: Companies negotiate favorable payment terms with suppliers, optimize payment schedules, and leverage technologies like electronic invoicing and payment systems to manage payables effectively.

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Related Questions

Which of the following is a primary difference between a privately held corporation in a public corporation?

Answers

Be more specific, we don't know what the "following options are"

Tobias is the manager of a major ski resort in Colorado that is open from October through March. What best describes his terms of employment?

seasonal
full-time
self-employed
entry level

Answers

Answer: It's seasonal.

Explanation:

Antiques ‘R’ Us is a mature manufacturing firm. The company just paid a dividend of $11.60, but management expects to reduce the payout by 5.25 percent per year, indefinitely. If you require a return of 11 percent on this stock, what will you pay for a share today?

Answers

If you require a return of 11% on this stock, you would be willing to pay approximately $191.13 for a share of Antiques 'R' Us today.

To determine the current share price of Antiques 'R' Us, we can use the dividend discount model (DDM) which calculates the present value of future dividends.

Given:

Dividend just paid = $11.60

Dividend reduction rate = 5.25% per year

Required return = 11%

We need to find the present value of future dividends to calculate the current share price.

Step 1: Calculate the expected dividend in the next period:

Expected dividend in the next period = Dividend just paid × (1 - Dividend reduction rate)

Expected dividend in the next period = $11.60 × (1 - 0.0525) = $11.60 × 0.9475 = $11.007

Step 2: Calculate the present value of future dividends:

Present value of future dividends = Expected dividend in the next period / (Required return - Dividend reduction rate)

Present value of future dividends = $11.007 / (0.11 - 0.0525) = $11.007 / 0.0575 = $191.13

Step 3: Calculate the current share price:

Since the dividend reduction rate is applied indefinitely, the current share price is the present value of future dividends.

Current share price = $191.13

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23 Spring Question 1 of 11 This quiz: 2 This questic Halifax Seafood makes 450 wooden packing boxes for fresh seafood per day, working in two 10-hour shifts. Due to increased demand, plant The plant is now able to produce 700 boxes per day. a) Before the change in work rules, the company's productivity per day = boxes/hour (Round your response to two decimal places) After the change, the new productivity level per day = boxes/hour (Round your response to two decimal places) b) Based on the changes made, the percent increase in productivity=% (Enter your response as a percentage rounded to two decimal pla c) If production is increased to 750 boxes per day (with the three 8-hour shifts), the new productivity = boxes/hour (Round your response to​

Answers

a. Before the change in work rules, the company's productivity per day was 22.50 boxes/hour.

b. After the change in work rules, the new productivity level per day is 35.00 boxes/hour.

c. If production is increased to 750 boxes per day with three 8-hour shifts, the new productivity level per day would be approximately 31.25 boxes/hour.

a) Before the change in work rules, Halifax Seafood produced 450 wooden packing boxes per day working in two 10-hour shifts. To calculate the productivity per day, we need to determine the number of boxes produced per hour.

Number of boxes produced per day = 450 boxes

Number of hours worked per day = 2 shifts × 10 hours per shift = 20 hours

Productivity per day before the change = Number of boxes produced per day / Number of hours worked per day

Productivity per day before the change = 450 boxes / 20 hours = 22.50 boxes/hour

Therefore, before the change in work rules, the company's productivity per day was 22.50 boxes/hour.

b) After the change, the company is now able to produce 700 boxes per day. To calculate the new productivity level per day, we need to determine the number of boxes produced per hour.

Number of boxes produced per day = 700 boxes

Number of hours worked per day = 2 shifts × 10 hours per shift = 20 hours

Productivity per day after the change = Number of boxes produced per day / Number of hours worked per day

Productivity per day after the change = 700 boxes / 20 hours = 35.00 boxes/hour

Therefore, after the change in work rules, the new productivity level per day is 35.00 boxes/hour.

c) If production is increased to 750 boxes per day with three 8-hour shifts, we can calculate the new productivity level per day.

Number of boxes produced per day = 750 boxes

Number of hours worked per day = 3 shifts × 8 hours per shift = 24 hours

New productivity per day = Number of boxes produced per day / Number of hours worked per day

New productivity per day = 750 boxes / 24 hours ≈ 31.25 boxes/hour

Therefore, if production is increased to 750 boxes per day with three 8-hour shifts, the new productivity level per day would be approximately 31.25 boxes/hour.

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Questionl G1 1. Various options are provided as possible answers to the following questions. Write down the question number choose the answer (e.g. 1.1. B). Choose the correct letter with the correct answer. For example, 1.1 E 1.1 An increase in the price of a product will lead to a/an... demanded. A. Increase in supply B. Increase in demand C. Decrease in quantity. D. Increase in quantity 1.2 A table that shows the quantity of goods and services bought at a different prices. A. Demand schedule. B. Demand curve. C. Supply curve. D. Quantity demanded. occurs when producers are willing and able to produce 1.3. A(n) a greater quantity of an item or service at each price. A. Increase in supply. B. Increase in demand. C. Decrease in demand. D. Decrease in supply 1.4. According to the law of demand, there is a between price and quantity demanded. A. Positive. B. Direct. C. Negative. D. Non-existing relationship (4x2)(8)​

Answers

The answrs to the questions are"

1.1 B - Increase in demand1.2 A - Demand schedule1.3 D - Decrease in supply1.4 C - Negative

How to answer the questions


1.1 - An increase in the price of a product will lead to a/an... demanded.

The correct answer is B. Increase in demand.

Explanation: When the price of a product increases, it typically leads to a decrease in the quantity demanded, not an increase. This is because consumers tend to buy less of a product as its price rises.

1.2 - A table that shows the quantity of goods and services bought at different prices.

The correct answer is A. Demand schedule.

Explanation: A demand schedule is a table that lists the various quantities of a good or service that consumers are willing to purchase at different price levels.

1.3 - A(n) a greater quantity of an item or service at each price.

The correct answer is D. Decrease in supply.

Explanation: A decrease in supply means that producers are willing and able to produce a lesser quantity of an item or service at each price level.

1.4 - According to the law of demand, there is a between price and quantity demanded.

The correct answer is C. Negative.

Explanation: The law of demand states that as the price of a product increases, the quantity demanded by consumers decreases, and vice versa. This inverse relationship between price and quantity demanded is negative.

(4x2)(8) - This is an arithmetic expression and not directly related to the previous questions. The expression simplifies to 64, which is the result of multiplying 4 by 2 and then multiplying the result by 8.

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Cape Corp. will pay a dividend of $3.80 next year. The company has stated that it will maintain a constant growth rate of 4.5 percent a year forever.


a.
If you want a return of 15 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

b. If you want a return of 12 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answers

a)  if you want a return of 15 percent, you would pay approximately $28.57 for the stock.

b) if you want a return of 12 percent, you would pay approximately 48.89$ for the stock.

To calculate the value of the stock, we can use the Gordon Growth Model, which is a method for valuing a stock based on its expected dividends and the required rate of return.

a. If you want a return of 15 percent, the value of the stock can be calculated as follows:

Dividend next year = $3.80

Growth rate = 4.5%

Required rate of return = 15%

Using the Gordon Growth Model formula:

Stock Value = Dividend next year / (Required rate of return - Growth rate)

Stock Value = $3 ÷ (15% - 4.5%)

Stock Value = $3 ÷ 10.5%

Stock Value ≈ $28.57

Therefore, if you want a return of 15 percent, you would pay approximately $36.19 for the stock.

b. If you want a return of 12 percent, the calculation is similar:

Dividend next year = $3.80

Growth rate = 4.5%

Required rate of return = 12%

Using the same formula:

Stock Value = Dividend next year / (Required rate of return - Growth rate)

Stock Value = $3 ÷ (8% - 4.5%)

Stock Value = $3 ÷ 3.5%

Stock Value ≈ 48.89$

Therefore, if you want a return of 12 percent, you would pay approximately 48.89$ for the stock.

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______segmentation has long been used by the marketers of products and services
such as automobiles, boats, clothing.cosmetics, financial services, and travel.
a. Behavioral
b. Age
C Gender
d. Income

Answers

Gender segmentation has long been used by the marketers of products and services such as automobiles, boats, clothing.cosmetics, financial services, and travel. The correct option is c.

a. Behavioral Segmentation:

Behavioral segmentation divides customers based on their behavior, usage patterns, and buying habits. It helps marketers understand customers' preferences, loyalty, purchase frequency, and responses to marketing efforts.

This type of segmentation allows marketers to tailor their offerings and marketing messages to specific customer behaviors and needs. For example, in the automobile industry, behavioral segmentation can be used to target customers who frequently upgrade their vehicles or those who prioritize fuel efficiency.

b. Age Segmentation:

Age segmentation categorizes customers into different age groups. This segmentation variable recognizes that different age groups have distinct preferences, lifestyles, and purchasing power.

Marketers use age segmentation to target products and services that align with the needs and desires of specific age demographics. For instance, clothing companies may create separate marketing campaigns to target teenagers, young adults, and middle-aged individuals, each catering to their unique fashion preferences.

c. Gender Segmentation:

Gender segmentation involves dividing customers based on their gender, recognizing that men and women often have different preferences and needs.

Marketers use gender segmentation to create targeted marketing messages and product offerings that appeal specifically to male or female customers. For instance, cosmetic companies may develop separate product lines and marketing strategies for men and women, focusing on their respective beauty needs and preferences.

d. Income Segmentation:

Income segmentation groups customers based on their income levels. It enables marketers to understand the purchasing power and affordability of different customer segments.

By targeting customers based on their income, marketers can tailor their pricing, promotions, and product offerings accordingly. For instance, financial services companies may offer premium banking services to high-income individuals, while providing budget-friendly options for customers with lower incomes. The correct option is c.

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he statement, “I have always wanted to work for your company,” demonstrates how an applicant can benefit the employer. Please select the best answer from the choices provided

Answers

The statement, “I have always wanted to work for your company,” demonstrates how an applicant can benefit the employer is false.

What is application as a worker?

An application for employment is a typical business form that contains questions that employers think pertinent. It is employed to select the most qualified applicant for a certain position inside the business.

The claim that an applicant can get something from the employer by saying, "I have always wanted to work for your company," is untrue.

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complete question;

The statement, “I have always wanted to work for your company,” demonstrates how an applicant can benefit the employer. Please select the best answer from the choices provided

a. True

b. False

The change in technology and the globalization have brought new pattern of organizing
today's companies, and thus, the managers need to consider these new concepts in
organization's design process. With this statement, discuss the emerging issues in
organization design and architecture.

Answers

Following are the emerging issues in organization design and architecture:Technology and Globalization, Customer Relations,Technical Knowledge, Flexibility, Employee's Well-being.

Following are the emerging issues in organization design and architecture:

Technology and Globalization: The modern era's rapid technology and globalization have forced the organizations to adopt a new pattern of organizing. Managers are focusing more on technology and globalization and they are ensuring that the company can cope with the emerging challenges.Customer Relations: Customers are the major driving force in every business. To maintain the customer base, the managers need to focus on customer relations as the organization's design process should be centered around their needs. This will help the managers in creating a company that provides excellent customer service to its customers.Technical Knowledge: The success of an organization depends on the technical knowledge of its managers. Managers need to have knowledge about new and emerging technologies so that they can use them to enhance the organization's capabilities. In addition, managers need to know how to apply this technical knowledge to improve the organization's structure and operations.Flexibility: Flexibility is a crucial component in the organization's design process. The managers need to design the organization that is flexible enough to adapt to new changes and technologies. This will help the managers in keeping up with the rapidly changing business environment.Employee's Well-being: The well-being of employees is also a significant issue in the organization's design process. The managers need to design the organization in a way that the employees can work efficiently, and their personal needs are also met. This will help in improving the employee's productivity and motivation level and ensure their loyalty to the organization.

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1. Suppose the Consumption function is given as C = 1500 +0.75Yd. Based on the information, please answer the following questions. A. What is Autonomous consumption? B. What is Marginal Propensity to Consume (MPC)? C. Draw the graph of consumption function? D. Calculate Marginal propensity to save (MPS)? E. Drive saving function F. Draw the graph of saving function. G. What will be saving if the disposable income is 10,000 birr?​

Answers

A. Autonomous consumption is 1500.

B. MPC in this case is 0.75.C.

C.The graph of consumption function is a straight line with slope MPC and passes through 1500 on y-axis.

D. MPS in this case is 0.25.

E. S = Yd – (1500 + 0.75Yd) = 0.25Yd – 1500.

F. The graph of saving function is a straight line with slope MPS and passes through -1500 on y-axis.

G. Savings are 1750 birr when disposable income is 10,000 birr.

Given that Consumption function is C = 1500 + 0.75Yd, where C is consumption expenditure, Yd is disposable income, 1500 is autonomous consumption expenditure, and 0.75 is the marginal propensity to consume (MPC).

A. Autonomous consumption is the consumption expenditure made by households when disposable income is zero. In this case, autonomous consumption is 1500.B. Marginal Propensity to Consume (MPC) is the fraction of change in consumption expenditure resulting from a change in disposable income. MPC is equal to the change in consumption expenditure divided by change in disposable income. MPC in this case is 0.75. C. The graph of consumption function is a straight line with slope MPC and passes through 1500 on y-axis D. Marginal propensity to save (MPS) is the fraction of change in savings resulting from a change in disposable income. MPS is equal to the change in savings divided by change in disposable income. MPC + MPS = 1. Therefore, MPS in this case is 0.25.E. Saving function is given by S = Yd – C, where S is savings. Substituting C = 1500 + 0.75Yd, we get S = Yd – (1500 + 0.75Yd) = 0.25Yd – 1500.F. The graph of saving function is a straight line with slope MPS and passes through -1500 on y-axis.G. If disposable income is 10,000 birr, then consumption expenditure is C = 1500 + 0.75Yd = 1500 + 0.75(10,000) = 8250 birr. Savings are S = Yd – C = 10,000 – 8250 = 1750 birr. Therefore, savings are 1750 birr when disposable income is 10,000 birr.

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WHAT IS Segmentation,

Answers

Answer:

Segmentation is to divide something into separate parts or sections

Nadia has put several signposts in her team's presentation. What is MOST likely one of the signposts she included?
OA.
B.
OC.
D.
To summarize: gas prices and cleaning costs are affecting our business.
Gas prices and costs of cleaning services are increasing drastically.
Now that we've talked about gas prices, let's turn to cleaning costs.
What should we do to lower cleaning costs for our organization?

Answers

Nadia has put several signposts in her team's presentation. The most likely one of the signposts she included is "Now that we've talked about gas prices, let's turn to cleaning costs." The correct answer is option c.

This is because signposts are words or phrases that speakers use to let their audience know where they are in their presentation or speech. Signposts also help speakers to smoothly move from one idea to another while also helping the audience to follow along.Some common examples of signposts include:To beginwithFirst,Secondly  Next Additionally Moreover Furthermore In addition In conclusion Therefore Thus As a result .

So, in the given options, "Now that we've talked about gas prices, let's turn to cleaning costs" is the most likely signpost that Nadia included because it shows the transition from one topic to another topic. Therefore, the correct answer is option C: "Now that we've talked about gas prices, let's turn to cleaning costs."

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Other Questions
5. what volume of 5.00 103 m hno3 is needed to titrate 100.00 ml of 5.00 103 m ca(oh)2 to the equivalence point? a) 12.5 ml b) 200. ml c) 50.0 ml d) 100. ml Suppose P(x) represents the profit on the sale of x Blu-ray discs. IfP(1,000) = 8,000andP'(1,000) = 6,what do these values tell you about the profit?P(1,000) represents the profit on the sale of Blu-ray discs.P(1,000) = 8,000,so the profit on the sale of Blu-ray discs is $ .P'(x)represents the ---------------Select--------------- marginal cost marginal revenue profit rate of change of the profit as a function of x.P'(1,000) = 6,so the profit is decreasing at the rate of $ per additional Blu-ray disc Which of the following statements is CORRECT? a. Using bonus depreciation rather than straight line depreciation normally has the effect of delaying the receipt of depreciation cash flows and thus reducing a project's forecasted NPV. b. Corporations must use the same depreciation method for both stockholder reporting and tax purposes. c. Since depreciation is a cash expense, the faster an asset is depreciated, the lower the projected NPV from Investing in the asset. d. Under current laws and regulations, corporations must use straight line depreciation for all assets whose lives are 5 years or longer. e. Using bonus depreciation rather than straight line depreciation normally has the effect of receiving depreciation cash flows immediately and thus increasing a project's forecasted NPV, Concord Corporation had the following selected transactions in the month of March. The company adjusts its accounts monthly. 1. The company has a 6%, $14,000 bank loan payable due in one year. Interest is payable on the first day of each following month and was last paid on March 1. 2. At the end of March, the company earned $250 interest on its investments. The bank deposited this amount in Concord's cash account on April 1. 3 Concord has five employees who each earn $200 a day. Salaries are normally paid on Mondays for work completed Monday through Friday of the previous week. Salaries were last paid on Monday, March 29. March 31 falls on a Wednesday this year. Salaries will be paid next on Monday, April 5. At the end of March, the company owed the utility company $500 and the telephone company $180 for services received during the month. These bills were paid on April 10. (Hint: Use the Utilities Expense account for the utility and telephone services) 5 At the end of March, Concord has earned service revenue of $2.980 that it has not yet billed. It bills its clients for this amount on April 4.Required:Record the journal entries. Based on a survey, assume that 27% of consumers are comfortable having drones deliver their purchases. Suppose that we want to find the probability that when six consumers are randomly selected, exactly two of them are comfortable with delivery by drones. Identify the values of n, x, p, and q. * The value of n is (Type an integer or a decimal. Do not round.) Based on a survey, assume that 29% of consumers are comfortable having drones deliver their purchases. Suppose that we want to find the probability that when four consumers are randomly selected, exactly two of them are comfortable with delivery by drones. Identify the values of n, x, p, and q. The value of n is 4. (Type an integer or a decimal. Do not round.) The value of x is 2. (Type an integer or a decimal. Do not round.) The value of p is 0.29. (Type an integer or a decimal. Do not round.) The value of q is (Type an integer or a decimal. Do not round). describe the three roles and responsibilities of learners in effective environmental educational classroom practice. 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Assume that no customers are blocked or abandon the system.Will the average waiting time in the queue increase, decrease, or stay the same?As a result of implementing this change will the average server utilization increase, decrease, or stay the same? 37.4 g iron (II) chloride in solution was mixed with 42.3 g potassium permanganate in thepresence of acid. The following reaction occurred:FeCl2 + KMnO4 + HCl FeCl3 + MnCl2 + KCl + H2Oa1. What mass (g) of iron (III) chloride was produced?a2. How many moles of HCl were required?a3. What mass (g) of the excess reactant was not used? Let u(t) = 2ti +(2-1); -8k Compute the derivative of the following function, (119 + 2t)uct ) - Select the correct choice below and fill in the answer box(es) to complete your choice. O A. The derivative is the scalar function B. The derivative is the vector-valued function (Dj+ k) 1- Can red estate assets become a liability? How orwhy cant? (a) How can a firm determine the best level of output and price for products that are jointly produced in fixed proportions? (b) Under what circumstances would a firm produce a product and then destroy it? logic is defined as a body of knowledge that evaluates _____________. assuming the company continues its current growth rate, what is the value of the companys stock? please layout each step used to determine the value of the stock. find the measure of the missing angles. x and y As a settlement for an insurance claim, Craig was offered one of two choices. He could either accept a lump-sum amount of $2402 now, or accept quarterly payments of $134 for the next six years. If the money is placed into a trust fund earning 6.01% compounded annually, which is the better option and by how much? Assume a trader who has no existing CPO positions is bullish on CPO spot and futures pricing over the next three months. He feels CPO prices will rise, and he wants to benefit from his prediction. He points out that the 3-month CPO futures with a 90-day maturity are now trading at $980/ton.1. What is the appropriate speculative strategy?2. Calculate the profit/loss if the CPO price is $1,176.00 in 90 days (at futures maturity).3. Calculate the profit/loss if the CPO price drops 20% to $784 in 90 days. In an observational study in which the sample is representative of the population, as the prevalence of disease increases among the population (while all other pertinent characteristics stay the same), the difference between the RR and the OR: a. Creates a J-curve b. Decreases c. Stays the same d. Cannot determine from the information given e. Increases A rectangular tank that is 8788 f3 with a square base and open top is to be constructed of sheet steel of a given thickness. Find the dimensions of the tank with minimum weight. The dimensions of the tank with minimum weight are (Simplify your answer. Use a comma to separate answers.)