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Questions and Answers
Which of the following is a concept of working capital management?
Which of the following is a concept of working capital management?
Which of the following is an example of a working capital investment policy?
Which of the following is an example of a working capital investment policy?
What does the cash conversion cycle measure?
What does the cash conversion cycle measure?
What is the optimal cash balance?
What is the optimal cash balance?
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What is the purpose of inventory control system including EOQ model, safety stock, and reorder point?
What is the purpose of inventory control system including EOQ model, safety stock, and reorder point?
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Study Notes
Working Capital Management Concepts
- The concept of working capital management involves managing and controlling a firm's current assets and liabilities to maintain liquidity and profitability.
Working Capital Investment Policy
- A working capital investment policy is an example of a policy that decides on the level of investment in current assets, such as cash, inventory, and accounts receivable.
Cash Conversion Cycle
- The cash conversion cycle measures the length of time it takes for a company to sell its inventory, collect its accounts receivable, and pay its accounts payable.
Optimal Cash Balance
- The optimal cash balance is the ideal amount of cash a company should maintain to meet its short-term financial obligations, while also minimizing the opportunity cost of holding excess cash.
Inventory Control System
- An inventory control system, including the Economic Order Quantity (EOQ) model, safety stock, and reorder point, is used to manage and regulate inventory levels to minimize stockouts and overstocking, thereby reducing costs and improving efficiency.
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Description
Test your knowledge on working capital management with this quiz! Learn about the concepts and significance of working capital management, as well as the different investment and financing policies. Explore topics such as cash and marketable securities management.
