Archive for May 2018

True Business Development Options With the Net Working Capital Now

This is the difference between the total turnover assets and short-term liabilities of the enterprise. Net working capital represents that part of the current assets, which is financed by long-term financial resources, both own and borrowed (for example, bank loans or debentures, bonds). You will also need to know what is net working capital.

Calculation and analysis of net working capital (working capital) is made in the program in the block Current financial needs of the enterprise.

  • Net working capital formula
  • Net working capital = Current assets – Current liabilities
  • Net working capital management

Management of working capital is a set of operational actions and decisions:

  • Monitoring the level of current assets (this includes cash assets, although they have no direct relation to working capital);
  • Observance of the established proportions between short-term and long-term loans used to finance current assets;
  • Maintaining the optimal level of investment in each type of current assets;
  • Search and formation of specific sources of credit, optimization of the level and structure of current liabilities;
  • Reduction of accounts payable;
  • Maintenance of continuous liquidity of the company and creation of conditions for its sustainable development;
  • the balance of cash flows ;
  • Forecasting, budgeting and constant monitoring of cash flows.

Net working capital is a “financial cushion” for the urgent repayment of all or most of the company’s short-term liabilities, and the continuation of the work, albeit to a lesser extent.



  • working capital,
  • equity,
  • main capital,
  • capital of the enterprise,
  • borrowed capital,
  • cost of capital,
  • capital structure,
  • Extra capital,
  • invested capital,
  • Invested capital.
  • Working capital, net current assets

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The risk decreases. The maximum value of net working capital can theoretically reach in the event that there is no short-term accounts payable.

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