The primary objective of working capital management is to ensure the efficient management of current assets, including cash, raw materials, work-in-process, finished goods, and receivables. Achieving this involves determining the optimal investment level in each component to support smooth business operations and financial health. The Role of Cash in Working Capital Management Cash is the…
The working capital cycle (WCC) is the time it takes for a business to convert its current assets and liabilities into cash. It’s also known as the cash conversion cycle. In simple terms, the working capital cycle or operating cycle refers to the length of time required to convert non-cash current assets like raw materials,…
A lease is a contract that outlines the terms under which one party agrees to rent an asset. This asset could include real estate, vehicles, equipment, or other types of property. The lessor is the party who owns the asset and provides the right to use it, while the lessee is the party who uses…