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Looking at the instrument company that is being examined, it is clear that they have very little working capital to utilize. Where, they have a total amount in working capital of £ 15,000. As the company paid out £1,700,000 in obligations and received a total of £1,825,000. This is important, because it shows that the business is undercapitalized, based upon their low working capital figures. As a result, the company needs to remain more liquid, to be properly capitalized for future investments
Table 17.3 Solution to a working capital problem in my organization
Problem identification
Low Working Capital
Analysis (investigation)
The working capital position of the company was affected by the total amounts of cash they invested in new inventory.
Conclusion to the analysis (results of the investigation) The business needs to be able to control their cash position, to effectively manage their working capital.The solution, listed as a set of SMART recommendations
NA
Strengths and weaknesses of the recommendations
The strength is that the underlying amount of working capital would improve. The weakness is that the company would invest in less inventory and other investments
The implications of the solution, if implemented
The solution of more effectively managing the cash will help the organization, to be able to invest in various long-term situations. While keeping their liquidity high enough that they do not face a number of challenges.
Bibliography
The Cash Flow Statement, n.d. Understanding Marketing and Financial Information, pp. 239 -- 256.
Financial Statements, n.d. Understanding Marketing and Financial Information, pg. 133.
Laddering, 2010, Free Dictionary. Available….....