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Impact of Current Assets on Working Capital

Impact of Current Assets on Working Capital – Working capital is a measure of a company’s liquidity and efficiency, and it is calculated as the difference between a company’s current assets and its current liabilities. Current assets are assets that can be converted into cash within a year, such as cash, accounts receivable, and inventory. Current liabilities are debts that are due within a year, such as accounts payable and short-term loans.

An increase in current assets can have a positive impact on working capital, as it increases the amount of cash and other assets that a company has available to pay off its current liabilities. This can improve the company’s liquidity and ability to meet its short-term obligations. For example, if a company increases its inventory, it will have more goods available to sell, which can result in increased cash flow and an increase in working capital.

On the other hand, a decrease in current assets can have a negative impact on working capital, as it decreases the amount of cash and other assets that a company has available to pay off its current liabilities. This can decrease the company’s liquidity and ability to meet its short-term obligations. For example, if a company reduces its inventory, it will have fewer goods available to sell, which can result in decreased cash flow and a decrease in working capital.


Syllabus:

Chapter 1:
– Introduction
– Literature Review
– Statement of the Problem
– Purpose of the Study
– Scope of the study
– Objectives of the Study
Chapter 2:
– Organization Profile
– Organization Chart
– Data Collection Method
Chapter 3:
– Results & discussion with Charts & graphs
– Findings
– Suggestions
– Conclusions
Chapter 4:
– Appendix
– Bibliography
– Joining Report
– Weekly Reports


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