Accounting

Concept of Working Capital

Concept of Working Capital

Working Capital is the difference between a company’s current assets, such as cash, accounts receivable, and inventories of raw materials and finished goods, and its current liabilities, such as accounts payable. Business organization requires adequate capital to establish business and operate .....

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Classification of Working Capital

Classification of Working Capital

Classification of Working Capital Working Capital refers to a firm’s investment in short term assets-cash, short term securities, accounts receivable, and inventories. It can be categorized on basis of Concept (gross working capital and net working capital) and basis of time (Permanent/ fixed W.....

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Importance of Working Capital

Importance of Working Capital

Importance of Working Capital Working capital is the lifeblood and nerve center of business. Working capital is very essential to maintain the smooth running of a business. It is important because it is a measure of a company’s ability to pay off short-term expenses or debts. No business can ru.....

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Disadvantages of Insufficient Working Capital

Disadvantages of Insufficient Working Capital

Disadvantages of Insufficient Working Capital Working capital measures a company’s ability to turn short-term assets into cash. The amount of working capital should be sufficient. An inadequate amount of working capital may create a lot of financial problems in business. Inadequate working capi.....

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Factors that Affecting Working Capital

Factors that Affecting Working Capital

Factors that Affecting Working Capital Requirements of working capital depend upon various factors such as the nature of the business, size of the business, the flow of business activities. It is the difference between a company’s current assets, like cash, accounts receivable, and inventories .....

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Determination of Working Capital

Determination of Working Capital

Determination of Working Capital Working capital is the difference between a company’s current assets and current liabilities. Determination of working capital requirement is one of the major short-term planning which plays a very vital role in operating the business successfully. It is calcula.....

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Common Components of Cost of Capital

Common Components of Cost of Capital

Common Components of Cost of Capital Cost of capital is a composite cost of the individual sources of funds including equity shares, preference shares, debt, and retained earnings. The individual cost of each source of financing is called a component of the cost of capital. The overall cost of ca.....

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Meaning of Cost of Capital

Meaning of Cost of Capital

Meaning of Cost of Capital Cost of Capital is the rate of return the firm expects to earn from its investment in order to increase the value of the firm in the market place. The investment decision is a major decision for an organization. The underinvestment decision process, the cost, and the be.....

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Statutory Company

Statutory Company

Statutory Company A company incorporated by a special Act of the legislature is called a statutory company. It is an autonomous body and is free from government control in respect of its internal management. It can be approved by either the Central or State Legislature Statutory Company.  Bangla.....

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Incremental Cost

Incremental Cost

As a consequence of a shift in any operation, an incremental cost is a difference in overall costs. Incremental costs are determined by analyzing, with one additional unit of production, the additional costs involved in the production process, such as raw materials. Incremental costs are likewise.....

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Importance of Cost of Capital

Importance of Cost of Capital

Cost of capital is considered as a standard of comparison for making different business decisions. It is a useful finance and accounting tool that companies and investors can use to make better decisions on how they allocate their money. It has such importance in financial decision making. Import.....

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Marginal Cost Of Production

Marginal Cost Of Production

The Marginal Production Cost is the rise or decrease in the overall cost of manufacturing one more unit of a commodity or service one more client that a company will incur. It is a basic concept used to make economically optimal choices and an important component of accounting and financial analy.....

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