Working capital refers to a company's short-term assets and liabilities related to day-to-day operations. It includes current assets like inventory, receivables, and cash, as well as current liabilities like payables. Managing working capital involves setting policies for maintaining optimal levels of current assets and financing them appropriately through short-term debt or long-term sources. The objective is to ensure sufficient liquidity while maximizing returns through efficient management of components like inventory, receivables, and payables.

10. Aggressive financing policy 6- Years $ Perm C.A. Fixed Assets Temp. C.A. S-T Loans L-T Fin: Stock, Bonds

12. Conservative financing policy 6- $ Years Perm C.A. Fixed Assets Marketable securities Zero S-T Debt L-T Fin: Stock, Bonds, Spon. C.L.

14. Moderate financing policy 6- Years $ Perm C.A. Fixed Assets Temp. C.A. S-T Loans L-T Fin: Stock, Bonds, Spon. C.L.

35. Profit and Loss account for the year ended 31 December 6- 2006 $’000 2007 $’000 Revenue 2,400 3,200 Cost of Sales 850 1,200 Gross profit 1,550 2,000 Other Operating costs 640 813 Operating profit 910 1,187 Interest - 3 Profit before Tax 910 1,184 Taxation 200 234 Profit after tax 710 950 Dividends 210 250 Retained Profit 500 700

36. Balance Sheet 31 December 6- 2006 2007 $’000 $’000 $’000 $’000 Non-current assets (net) 1,800 2,400 Current Assets Inventory of finished good 300 475 Inventory of components 100 150 Receivables 350 600 Cash 300 10 1,050 1,235 Total assets 2,850 3,635 Current Liabilities Overdraft - 45 Trade Payables 300 400 Other Payables 100 40 400 485 Ordinary Shares ($0.50) 1,000 1,000 Accumulated Profit 1,450 2,150 Total equity and liabilities 2, 8 50 3, 635