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Respond to the following in a minimum of 125 words: Working capital assets are comprised of...

Respond to the following in a minimum of 125 words:

Working capital assets are comprised of cash, accounts receivables, and inventory. Is one more important to manage than another? Why? Why not? Which of these are the most difficult to manage?

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Answer #1

Working Capital of any business is the balance of its incomes (assets) and expenses (liabilities). Working Capital comprises of working capital assets and working capital liabilities.

Working Capital assets comprises of all these which are cash, accounts receivables and inventory. These are important for the Working Capital Management and requires to be managed because working capital represents the operating liquidity of any business or entity.

  • All the assets are important to be managed so, it cannot be said that one is more important to manage than another. But it can be said that there can be difficulty in management of accounts receivables as accounts receivables requires a whole set of department for their collection and for keeping their accounting.
  • Cash can be managed easily and it is an important part of working capital assets. It requires only proper accounting.
  • Inventory also does not create much difficulty in its management.

So, overall it can be said that working capital assets are comprised of cash, accounts receivables and inventory. No asset is more important to manage than another and the most difficult in these working capital assets to manage are the accounts receivables.

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