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Essay's paper info
| Topic: |
Business
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| Number of pages / Number of words: |
6 / 1552 |
Essay's paper body
Retailers hold sales to free buying dollars for future months.
Question 3.
The Working Capital for the Reed Clothier Business is the amount by which current assets exceed current liabilities.
In this instance it is:
Current Assets: $ 921,000
Current Liabilities: $ 457,000
Working Capital: $ 464,000
The working capital is used to fund the operations of Reed, such as purchases of raw materials, office supplies, salaries, products and so on...
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More specifically it finances the cash conversion cycle of the business which is the number of days required to convert materials into finished goods, finished goods into sales, and accounts receivables into cash. In the case of Reed the business is a retail shop and they purchase completed products...
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