10 Questions
What is the main purpose of financial goals?
To achieve financial milestones in earning, saving, investing, and spending
Which type of financial goal takes less than 3 months to achieve?
Short-Term
What is the main characteristic of Short Term Finance?
It involves working capital financing
What is the main function of Working Capital Management?
To optimize the balance between short-term assets and liabilities
Why is understanding Working Capital Management crucial for businesses?
To have enough cash to meet short-term obligations and fund growth
What does the Working Capital Cycle (WCC) measure?
Time taken to convert net current assets and current liabilities into cash
Which of the following is a source of Short Term Working Capital Financing?
Letter of Credit
What is the purpose of Trade Credit in working capital management?
Provides a floating period to manage cash flow
How can a company reduce its Working Capital Cycle according to the text?
Reducing time taken to convert inventory into sales
Why is short-term financing considered less risky than long-term financing?
Short-term creditors grant credit for a shorter period of time
Learn about financial goals, which are the milestones you plan to achieve in terms of earning, saving, investing, and spending to match your short-term, medium, and long-term plans. Explore the 3 types of financial goals: short term (less than 3 months), intermediate (3-12 months), and long term (more than 12 months). Understand short term finance as sources of finance for a small period (less than a year).
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