Stated simply, Working Capital = Current Assets - Current Liabilities. This equation helps a company (and its financing sources) understand whether it has enough short term cash inflows to cover its short term cash outflows, also referred to as liquidity. But it’s not as simple as that. And, because it is the elemental center of cash flow, which in turn is the lifeblood of any business, it deserves much attention. Understanding the various parts of working capital will allow you to develop a plan for taming your working capital and, instead, have it work for you. In this webinar you will learn what parts of the balance sheet make up working capital and what actions cause the most problems with cash flow. It also covers best practices for managing working capital that will allow you to avoid working capital issues that can negatively impact cash flow, tax acceleration and make financing difficult to find.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/mastering-the-concept-of-working-capital-2020/
Company cash flow, financing basics for engineers 190818Moustafa M Elsayed
The document provides an overview of company cash flow and working capital management concepts. It defines key terms like assets, liabilities, equity, liquidity, working capital, and cash flow. It discusses calculating and managing optimum working capital levels. Tips are provided for improving cash flow through accounts receivable, accounts payable, and inventory management. Cash budgeting and cash flow controlling indices like leverage and working capital ratios are also summarized.
The document discusses various financial ratios used to evaluate the financial health and performance of a business. It defines ratios that measure leverage, liquidity, profitability, and efficiency. These include the debt-to-asset ratio, quick ratio, current ratio, net profit margin, return on investment, and return on equity. Calculating and analyzing these ratios helps owners and managers assess the business's solvency, working capital management, profit generation, and use of assets and equity.
If you don't know the financials, you don't know the business. Financial statements are often an overlooked tool to better understand a business. Financial statements are essentially the scorecard of the business. If you can’t read the scorecard your business may be in jeopardy and you not even know it. Many business owners don’t understand the story they tell. This deck helps you understand the basic financial statements, the importance, steps of an analysis, ratios, and a quick valuation.
Construction Futures Wales - Managing Cash Flow 2016Rae Davies
This document discusses managing cash flow and developing cash management skills. It begins by introducing the Construction Futures Wales (CFW) program which provides consultancy support. It then discusses how CFW can help companies with cash flow issues through services like business diagnostics and leadership courses. The rest of the document focuses on developing cash management skills, including how to construct cash flow forecasts and monitor key performance indicators. It emphasizes that cash management requires considering other business functions and processes that impact cash flow. Companies are encouraged to take the CFW health check and attend upcoming events to get help improving their cash management.
Organizational financial practices in Professional Practices of ITMuhammad Shakir Khan
The document discusses key organizational financial practices for a new software company. It covers the need for initial capital, sources of funding like grants, loans, and equity sales, as well as ongoing budgeting, monitoring, and managing working capital and cash flow. Setting up a new software company requires an initial investment for salaries, office space, equipment, marketing, and other startup costs. A business plan is needed to attract funding from grants, loans, or equity investors. Ongoing budgeting and cash flow management are also important to ensure the company can pay bills as income and expenses may not match up.
Working capital management involves maintaining a balance between short-term assets and liabilities to ensure business continuity and ability to meet obligations. Key aspects include:
1) Determining optimal levels of current assets like inventory and receivables by balancing liquidity, profitability and risk. Higher current assets increase liquidity but reduce profits, while lower assets increase risk.
2) Financing current asset levels through a combination of short and long-term financing. A conservative approach uses more long-term financing for less risk, while an aggressive approach uses more short-term financing for higher potential profits but more risk.
3) Current asset and financing decisions are interdependent - higher current asset levels allow more short-term financing
Working capital management ppt @ bec doms mba financeBabasab Patil
The document discusses working capital management, including definitions of key terms, analysis of SKI Inc.'s working capital ratios compared to industry averages, cash conversion cycle calculation, cash budgeting, inventory and accounts receivable management strategies, and financing policies for working capital. It finds that SKI has excessive working capital levels and could improve profitability by reducing inventory holdings and accounts receivable collection periods.
Company cash flow, financing basics for engineers 190818Moustafa M Elsayed
The document provides an overview of company cash flow and working capital management concepts. It defines key terms like assets, liabilities, equity, liquidity, working capital, and cash flow. It discusses calculating and managing optimum working capital levels. Tips are provided for improving cash flow through accounts receivable, accounts payable, and inventory management. Cash budgeting and cash flow controlling indices like leverage and working capital ratios are also summarized.
The document discusses various financial ratios used to evaluate the financial health and performance of a business. It defines ratios that measure leverage, liquidity, profitability, and efficiency. These include the debt-to-asset ratio, quick ratio, current ratio, net profit margin, return on investment, and return on equity. Calculating and analyzing these ratios helps owners and managers assess the business's solvency, working capital management, profit generation, and use of assets and equity.
If you don't know the financials, you don't know the business. Financial statements are often an overlooked tool to better understand a business. Financial statements are essentially the scorecard of the business. If you can’t read the scorecard your business may be in jeopardy and you not even know it. Many business owners don’t understand the story they tell. This deck helps you understand the basic financial statements, the importance, steps of an analysis, ratios, and a quick valuation.
Construction Futures Wales - Managing Cash Flow 2016Rae Davies
This document discusses managing cash flow and developing cash management skills. It begins by introducing the Construction Futures Wales (CFW) program which provides consultancy support. It then discusses how CFW can help companies with cash flow issues through services like business diagnostics and leadership courses. The rest of the document focuses on developing cash management skills, including how to construct cash flow forecasts and monitor key performance indicators. It emphasizes that cash management requires considering other business functions and processes that impact cash flow. Companies are encouraged to take the CFW health check and attend upcoming events to get help improving their cash management.
Organizational financial practices in Professional Practices of ITMuhammad Shakir Khan
The document discusses key organizational financial practices for a new software company. It covers the need for initial capital, sources of funding like grants, loans, and equity sales, as well as ongoing budgeting, monitoring, and managing working capital and cash flow. Setting up a new software company requires an initial investment for salaries, office space, equipment, marketing, and other startup costs. A business plan is needed to attract funding from grants, loans, or equity investors. Ongoing budgeting and cash flow management are also important to ensure the company can pay bills as income and expenses may not match up.
Working capital management involves maintaining a balance between short-term assets and liabilities to ensure business continuity and ability to meet obligations. Key aspects include:
1) Determining optimal levels of current assets like inventory and receivables by balancing liquidity, profitability and risk. Higher current assets increase liquidity but reduce profits, while lower assets increase risk.
2) Financing current asset levels through a combination of short and long-term financing. A conservative approach uses more long-term financing for less risk, while an aggressive approach uses more short-term financing for higher potential profits but more risk.
3) Current asset and financing decisions are interdependent - higher current asset levels allow more short-term financing
Working capital management ppt @ bec doms mba financeBabasab Patil
The document discusses working capital management, including definitions of key terms, analysis of SKI Inc.'s working capital ratios compared to industry averages, cash conversion cycle calculation, cash budgeting, inventory and accounts receivable management strategies, and financing policies for working capital. It finds that SKI has excessive working capital levels and could improve profitability by reducing inventory holdings and accounts receivable collection periods.
This document discusses sources of business finance. It explains that businesses need finance for starting up, expanding production capacity, developing new products, entering new markets, acquisitions, relocating premises, and day-to-day operations. Sources of finance discussed include retained profits, sale of assets, reducing stock levels, owner's savings, share issues, loan stock, bank lending, and mortgages. The advantages and disadvantages of different sources are provided.
The study investigates the relationship between aggressive and conservative working capital policies and firm profitability and risk. It analyzes 208 public companies over 1998-2005 and finds:
1) A conservative working capital policy, with more permanent financing of current assets, is associated with lower risk but also lower profitability.
2) An aggressive policy, with extensive short-term financing of both current and fixed assets, is riskier but more profitable.
3) Firms' stock prices are influenced by their working capital management approach, with aggressive policies viewed favorably by investors.
Working capital refers to the capital required to finance short-term operating expenses such as raw materials, wages, and other day-to-day expenses. It is needed to purchase inventory, pay employees, and cover other daily costs. Determining the appropriate level of working capital requires considering factors like the nature of the business, size, production processes, cash needs, and seasonality. There are various methods for estimating working capital, and having the right amount provides benefits like maintaining goodwill and securing favorable loan terms, while too little or too much can lead to inefficiency.
Working capital Management notes for MBA students to prepare for exam. The file contains ample theory and solved problems on working capital management
The document discusses working capital management. It defines working capital as the difference between current assets and current liabilities, and how it represents a company's liquidity and short-term financial health. It discusses various metrics for measuring working capital, such as current ratio and quick ratio, and how companies can manage their working capital through policies that balance liquidity, profitability and risk. The document also covers financing of current assets, cash management, and methods for dealing with cash shortages or surpluses.
The document discusses financial planning and pitching for startups. It provides guidance on creating a financial plan to understand funding needs and describe the vision to partners and investors. It also explains that the purpose of pitching is to generate interest for follow up conversations, as investors rarely provide funding solely based on a pitch. The document then gives suggestions on what financial information to include in a pitch, such as market size, costs, funding requirements, and profitability projections. It also warns against unrealistic assumptions and provides too much detail.
This document provides tips for entrepreneurial companies during an economic slowdown. It recommends preparing detailed short-term forecasts, strengthening the balance sheet by improving financial ratios and having more cash, cutting costs and reducing burn rates, focusing on revenue generation and variable costs, shifting to equity-based compensation, slowing down payables and accelerating receivables, turning inventories, and exploring funding alternatives. Maintaining strong financial management is key to weathering an economic downturn.
This document discusses working capital, which refers to the capital required for financing short-term operations like raw materials, wages, expenses. It is important for businesses to maintain adequate working capital to pay debts and support daily operations. The document outlines different types of working capital, sources of funding, and how ratios can assess working capital management efficiency. Maintaining the right level of working capital is essential for business liquidity, profitability and reducing risk of insolvency.
Most clients achieve over 3,000% ROI when investing our services
More than 70% clients overcome financial distresses and avoided undesired consequences
Over 90% clients stay with us more than 10 years after engaging us
Complete integrated multi-disciplines for all SMEs’ management, marketing, IT, & financial needs
1st Ever Comprehensive Framework To Grow Company Healthily & Holistically With +Ve Cashflows
The document discusses strategies for improving cash flow and managing cash effectively in a business. It recommends generating cash from sources like private placements, accelerating customer payments, leveraging assets, and developing new products. It warns against manipulating reports or offering extended payment terms to improperly boost short-term cash at the expense of future sales. The document also stresses controlling costs, using metrics like discounted cash flow and payback period to evaluate projects, and implementing operational changes through outsourcing to lower costs and generate cash.
The document discusses working capital management. It defines working capital as current assets minus current liabilities, and explains that it measures a company's liquid assets available to operate its business. The management of working capital involves managing inventory, accounts receivable, accounts payable, and cash. The goal is to ensure the company can continue operations and meet short-term debts and expenses.
How to Manage working Capital in Hotel-Basic accounting principles #9 by Din...DINOLEONANDRI
The document discusses managing working capital in hotel industries. It defines working capital as the short-term assets used to fund daily operations, such as cash, receivables, and inventory. It also discusses the cash conversion cycle where cash is used to purchase inventory, turned into receivables through sales, and then collected as cash. Managing working capital involves balancing current assets and liabilities to ensure sufficient short-term funds and liquidity. The goal is to efficiently manage resources and improve cash flow.
This revision presentation highlights the key sources of finance potentially available to a new business and outlines the key issues when choosing the source and mix of finance.
Learn how to be the CFO for you own startup. What are the important financial concepts for an entrepreneur, the financial documents for startups, reporting, balance sheets etc. And the main budgetary provisions for startups.
This document provides an overview of working capital. It defines working capital as a measure of liquidity and efficiency that includes current assets like cash, inventory, and accounts receivable, as well as current liabilities like accounts payable. It discusses the different types of working capital based on balance sheet views like gross and net working capital as well as operating cycle views like permanent/fixed and temporary/variable working capital. The document also covers topics like receivables management, determinants of working capital, issues in management, and different approaches to financing current assets.
The document discusses various topics related to business financing including forms of business ownership, financial planning, sources and types of capital, capital structure, factors determining capital structure, measures of capitalization, term and working capital, venture capital, angel financing, export finance, crowd funding, sources of working capital, assessment of working capital needs, importance of working capital management, institutional sources of finance, lease financing, tax benefits, and negotiations with financiers.
This document discusses concepts and issues related to working capital management. It covers determining the optimal level of current assets by analyzing tradeoffs between liquidity, profitability and risk. The document also discusses classifying current assets as permanent or temporary. It analyzes approaches to financing current assets, including hedging short-term assets with short-term financing and considering conservative versus aggressive mixes of short and long-term financing. The level of current assets and financing decisions are interdependent factors in working capital management.
The document defines the cost of capital as the rate of return a company must pay to its various sources of funding. There is variation in cost of capital due to different levels of risk associated with different types of investments. It is used to evaluate investment projects by comparing projected returns to required returns. The cost of capital consists of the costs of different sources of funding like equity, debt, preferred stock, and retained earnings. It is an important consideration in capital budgeting and structure decisions. Methods for calculating the specific costs of different sources are also provided.
An introduction to working Capital ManagementNeeraj Chitkara
This document provides an introduction to working capital management. It defines working capital as the capital required to meet the day-to-day expenses of a business. Working capital can be classified based on concept into gross working capital and net working capital, and based on need into permanent, temporary, regular and reserve working capital. The operating cycle concept and cash conversion cycle are also introduced as methods to estimate working capital requirements. Working capital needs vary between different types of firms.
Meaning of corporate finance, meaning of fixed and working capital, factors affecting requirement of fixed capital, factors affecting requirement of working capital, what is capital structure, and componenets of capital structure.
Managing your enterprise growth by numbers by Vinod Keni | #TiEInstitutetiemumbai
Managing finances and understanding key financial metrics are essential for business success. Effective financial management allows businesses to plan strategically, borrow money easily, provide information to investors, improve profitability and efficiency, and make better decisions. Calculating and analyzing financial ratios related to liquidity, debt, inventory, profitability, and asset use helps businesses understand their financial position and identify areas for improvement. Maintaining proper working capital levels and avoiding overtrading are also important aspects of capital management.
This document discusses the importance of working capital management for companies. It defines working capital as the difference between current assets and current liabilities. Effective working capital management is important to ensure liquidity while not overinvesting in current assets. The document analyzes working capital trends, efficiency using various ratios, and a company's liquidity position to evaluate working capital needs.
This document discusses sources of business finance. It explains that businesses need finance for starting up, expanding production capacity, developing new products, entering new markets, acquisitions, relocating premises, and day-to-day operations. Sources of finance discussed include retained profits, sale of assets, reducing stock levels, owner's savings, share issues, loan stock, bank lending, and mortgages. The advantages and disadvantages of different sources are provided.
The study investigates the relationship between aggressive and conservative working capital policies and firm profitability and risk. It analyzes 208 public companies over 1998-2005 and finds:
1) A conservative working capital policy, with more permanent financing of current assets, is associated with lower risk but also lower profitability.
2) An aggressive policy, with extensive short-term financing of both current and fixed assets, is riskier but more profitable.
3) Firms' stock prices are influenced by their working capital management approach, with aggressive policies viewed favorably by investors.
Working capital refers to the capital required to finance short-term operating expenses such as raw materials, wages, and other day-to-day expenses. It is needed to purchase inventory, pay employees, and cover other daily costs. Determining the appropriate level of working capital requires considering factors like the nature of the business, size, production processes, cash needs, and seasonality. There are various methods for estimating working capital, and having the right amount provides benefits like maintaining goodwill and securing favorable loan terms, while too little or too much can lead to inefficiency.
Working capital Management notes for MBA students to prepare for exam. The file contains ample theory and solved problems on working capital management
The document discusses working capital management. It defines working capital as the difference between current assets and current liabilities, and how it represents a company's liquidity and short-term financial health. It discusses various metrics for measuring working capital, such as current ratio and quick ratio, and how companies can manage their working capital through policies that balance liquidity, profitability and risk. The document also covers financing of current assets, cash management, and methods for dealing with cash shortages or surpluses.
The document discusses financial planning and pitching for startups. It provides guidance on creating a financial plan to understand funding needs and describe the vision to partners and investors. It also explains that the purpose of pitching is to generate interest for follow up conversations, as investors rarely provide funding solely based on a pitch. The document then gives suggestions on what financial information to include in a pitch, such as market size, costs, funding requirements, and profitability projections. It also warns against unrealistic assumptions and provides too much detail.
This document provides tips for entrepreneurial companies during an economic slowdown. It recommends preparing detailed short-term forecasts, strengthening the balance sheet by improving financial ratios and having more cash, cutting costs and reducing burn rates, focusing on revenue generation and variable costs, shifting to equity-based compensation, slowing down payables and accelerating receivables, turning inventories, and exploring funding alternatives. Maintaining strong financial management is key to weathering an economic downturn.
This document discusses working capital, which refers to the capital required for financing short-term operations like raw materials, wages, expenses. It is important for businesses to maintain adequate working capital to pay debts and support daily operations. The document outlines different types of working capital, sources of funding, and how ratios can assess working capital management efficiency. Maintaining the right level of working capital is essential for business liquidity, profitability and reducing risk of insolvency.
Most clients achieve over 3,000% ROI when investing our services
More than 70% clients overcome financial distresses and avoided undesired consequences
Over 90% clients stay with us more than 10 years after engaging us
Complete integrated multi-disciplines for all SMEs’ management, marketing, IT, & financial needs
1st Ever Comprehensive Framework To Grow Company Healthily & Holistically With +Ve Cashflows
The document discusses strategies for improving cash flow and managing cash effectively in a business. It recommends generating cash from sources like private placements, accelerating customer payments, leveraging assets, and developing new products. It warns against manipulating reports or offering extended payment terms to improperly boost short-term cash at the expense of future sales. The document also stresses controlling costs, using metrics like discounted cash flow and payback period to evaluate projects, and implementing operational changes through outsourcing to lower costs and generate cash.
The document discusses working capital management. It defines working capital as current assets minus current liabilities, and explains that it measures a company's liquid assets available to operate its business. The management of working capital involves managing inventory, accounts receivable, accounts payable, and cash. The goal is to ensure the company can continue operations and meet short-term debts and expenses.
How to Manage working Capital in Hotel-Basic accounting principles #9 by Din...DINOLEONANDRI
The document discusses managing working capital in hotel industries. It defines working capital as the short-term assets used to fund daily operations, such as cash, receivables, and inventory. It also discusses the cash conversion cycle where cash is used to purchase inventory, turned into receivables through sales, and then collected as cash. Managing working capital involves balancing current assets and liabilities to ensure sufficient short-term funds and liquidity. The goal is to efficiently manage resources and improve cash flow.
This revision presentation highlights the key sources of finance potentially available to a new business and outlines the key issues when choosing the source and mix of finance.
Learn how to be the CFO for you own startup. What are the important financial concepts for an entrepreneur, the financial documents for startups, reporting, balance sheets etc. And the main budgetary provisions for startups.
This document provides an overview of working capital. It defines working capital as a measure of liquidity and efficiency that includes current assets like cash, inventory, and accounts receivable, as well as current liabilities like accounts payable. It discusses the different types of working capital based on balance sheet views like gross and net working capital as well as operating cycle views like permanent/fixed and temporary/variable working capital. The document also covers topics like receivables management, determinants of working capital, issues in management, and different approaches to financing current assets.
The document discusses various topics related to business financing including forms of business ownership, financial planning, sources and types of capital, capital structure, factors determining capital structure, measures of capitalization, term and working capital, venture capital, angel financing, export finance, crowd funding, sources of working capital, assessment of working capital needs, importance of working capital management, institutional sources of finance, lease financing, tax benefits, and negotiations with financiers.
This document discusses concepts and issues related to working capital management. It covers determining the optimal level of current assets by analyzing tradeoffs between liquidity, profitability and risk. The document also discusses classifying current assets as permanent or temporary. It analyzes approaches to financing current assets, including hedging short-term assets with short-term financing and considering conservative versus aggressive mixes of short and long-term financing. The level of current assets and financing decisions are interdependent factors in working capital management.
The document defines the cost of capital as the rate of return a company must pay to its various sources of funding. There is variation in cost of capital due to different levels of risk associated with different types of investments. It is used to evaluate investment projects by comparing projected returns to required returns. The cost of capital consists of the costs of different sources of funding like equity, debt, preferred stock, and retained earnings. It is an important consideration in capital budgeting and structure decisions. Methods for calculating the specific costs of different sources are also provided.
An introduction to working Capital ManagementNeeraj Chitkara
This document provides an introduction to working capital management. It defines working capital as the capital required to meet the day-to-day expenses of a business. Working capital can be classified based on concept into gross working capital and net working capital, and based on need into permanent, temporary, regular and reserve working capital. The operating cycle concept and cash conversion cycle are also introduced as methods to estimate working capital requirements. Working capital needs vary between different types of firms.
Meaning of corporate finance, meaning of fixed and working capital, factors affecting requirement of fixed capital, factors affecting requirement of working capital, what is capital structure, and componenets of capital structure.
Managing your enterprise growth by numbers by Vinod Keni | #TiEInstitutetiemumbai
Managing finances and understanding key financial metrics are essential for business success. Effective financial management allows businesses to plan strategically, borrow money easily, provide information to investors, improve profitability and efficiency, and make better decisions. Calculating and analyzing financial ratios related to liquidity, debt, inventory, profitability, and asset use helps businesses understand their financial position and identify areas for improvement. Maintaining proper working capital levels and avoiding overtrading are also important aspects of capital management.
This document discusses the importance of working capital management for companies. It defines working capital as the difference between current assets and current liabilities. Effective working capital management is important to ensure liquidity while not overinvesting in current assets. The document analyzes working capital trends, efficiency using various ratios, and a company's liquidity position to evaluate working capital needs.
This document is a dissertation report submitted by Rajeshwar Ojha to Dr. Vikas Kumar Jaiswal on working capital management. It includes an introduction that defines working capital and its importance for business operations. It also discusses different types of working capital such as permanent working capital and temporary working capital. The report will examine various components of working capital management including cash, inventory, accounts receivable and payable. It aims to explore the impact of working capital management on business profitability and shareholder wealth.
Stepping into a role which requires business finance knowledge? Here is a short guide offering advice, tools, and expertise that you will need to equip yourself with to be successful. Check out our Diploma in Business Finance for more.
The document provides an overview of working capital, including definitions, concepts, and management. It defines working capital as the capital required for financing short-term assets like cash, inventory, and receivables. There are two concepts of working capital - the balance sheet concept focuses on current assets and liabilities, while the operating cycle concept looks at cash flows through purchasing, production, and sales cycles. Proper management of working capital is important, as both excess and inadequate working capital can hurt a business. Factors like industry, sales, and inventory turnover affect working capital needs. Forecasting and estimating working capital requirements involves considering items like materials, production timelines, credit terms, and cash flows.
The document discusses the working capital cycle, which measures how quickly a business can convert current assets like inventory and accounts receivable into cash. It explains the typical steps in the working capital cycle as inventory days, receivable days, and payable days. The working capital cycle formula is given as inventory days + receivable days - payable days. An example calculation is provided. The document also discusses strategies for managing working capital, including aggressive versus conservative approaches and sources of working capital financing.
The document discusses working capital management, including its definition as managing short-term assets and liabilities to ensure sufficient cash flow. It covers the objectives of working capital management like purchasing inventory and paying expenses. Types of working capital include gross, net, fixed, and variable. Factors that determine working capital requirements include the nature of business, size, and seasonality. Methods to estimate working capital needs are also presented.
This document discusses working capital management. It defines working capital as the capital required to finance short-term assets like cash, inventory, and receivables. It presents two concepts of working capital - the balance sheet concept, which is the excess of current assets over current liabilities, and the operating cycle concept, which involves the cash flows from purchasing inventory to collecting from sales. The document outlines factors that influence working capital needs and the risks of excess versus inadequate working capital. It also provides examples of estimating working capital requirements for trading and manufacturing businesses.
Working capital represents a company's short-term operating liquidity and is calculated as current assets minus current liabilities. It refers to the capital required to meet short-term obligations including expenses, pay employees and suppliers. The document discusses the importance of efficiently managing working capital to maintain smooth operations and improve profitability through objectives like optimizing the working capital cycle and minimizing capital costs. Proper working capital management is important for business liquidity and performance.
Management of Working Capital- Britannia Industries Ltd.Nikita Jangid
The document discusses working capital and its management. It defines working capital as the capital required for financing day-to-day business operations. Shortage of working capital can cause business failures while sufficient working capital is important for business success and liquidity. The document also discusses different types of working capital like permanent working capital and temporary working capital. It outlines the goals of working capital management as ensuring sufficient cash flow and balancing current assets and liabilities. Key factors that determine working capital requirements include the nature of industry, sales volume, inventory and receivables turnover, and the production cycle.
Here are some key characteristics of common legal forms for MSMEs:
- Sole proprietorships have unlimited liability but are simple to form.
- Partnerships like general and limited partnerships require more than one owner but partners have unlimited liability in general partnerships. Limited partners have limited liability.
- Corporations provide liability protection for owners/shareholders but have more complex registration requirements.
- LLCs are flexible structures that combine liability protection for owners with pass-through taxation like sole proprietorships or partnerships.
- Other structures like cooperatives prioritize member ownership over private control.
The best structure depends on an MSME's needs around liability, taxes, ownership and governance. Consulting legal and accounting experts can help determine
MHM's J. Scott Denlinger's presentation from the Finance, Human Resources, Business Operations Conference - June 4-5, 2015.
During this presentation, Scott covered:
*Determining appropriate level of reserves
*Building and maintaining operating reserves
*Budgeting for increases in reserves
*How to create a cash flow budget
Falcon is one of the leading P2P Invoice Discounting platforms in India where we connect blue chip companies with investors. We aim to revolutionize the investment market in India by creating a one-stop shop for all borrowers & investors with varied profiles and needs who can have access without any risk. Unlike banks and financial institutions Falcon increases investor's yields by eliminating mediators like commercial banks, depository institutions etc
This document discusses the meaning and importance of working capital for businesses. It defines working capital as the capital required for financing short-term assets like inventory, cash, and debtors. There are two concepts of working capital - gross working capital, which is the total current assets, and net working capital, which is current assets minus current liabilities. The document outlines the key components of current assets and current liabilities. It emphasizes the importance of adequate working capital for business solvency, cash flow, and meeting short-term obligations. Both excessive and inadequate working capital can harm a business.
The document provides an introduction to working capital management. It defines working capital as "capital invested in current assets" which are assets that can be converted to cash within a short time. It then discusses key concepts like gross working capital, net working capital, and the operating cycle. The importance of working capital management and determining adequate working capital requirements is emphasized. Techniques for managing current assets like cash, receivables, and inventory are also summarized.
Key person protection is important for business continuity and to protect against financial loss in the event a key person dies or becomes critically ill. It helps minimize business interruption, ensures loan obligations are met, and protects startups and management buyouts that rely heavily on certain skills and relationships.
The document discusses the meaning and importance of working capital. It defines working capital as the capital required for day-to-day business operations, including funds used for raw materials, wages, expenses, and current assets like inventory. There are two concepts of working capital - gross working capital, which is total current assets, and net working capital, which is current assets minus current liabilities. An adequate level of working capital is important for business solvency, goodwill, securing loans, cash discounts, and meeting regular commitments, while too much or too little working capital can both harm a business.
This document discusses working capital management. It defines working capital as short-term financing used for daily business operations. It notes that working capital involves managing current assets like cash, accounts receivable, and inventory, as well as current liabilities like accounts payable. The document outlines different types of working capital, factors that influence working capital needs, sources of working capital, and the operating cycle from procuring materials to collecting from debtors. The overall goal of working capital management is to optimize current assets and meet daily expenses while minimizing costs.
My Business is Growing, Now What? Financial Management Skills for the Entrepr...McKonly & Asbury, LLP
The document discusses building successful employee relationships as a cornerstone to fraud prevention and risk management. It covers introducing David Blain and Michael Hoffner, partners at McKonly & Asbury, who will discuss financial management skills for entrepreneurs. They will focus on balance sheet management, cash flow management, why ratios are important, and developing long term value. Questions are welcomed at the end.
Working capital refers to a company's short-term assets and liabilities involved in day-to-day operations. It includes current assets like inventory, cash, and receivables, as well as current liabilities like payables and short-term debt. Managing working capital effectively ensures a company has enough cash to pay bills on time, maintains optimal inventory levels, collects receivables efficiently, and uses short-term financing at low cost. Both excess and inadequate working capital can hurt a business, so companies must forecast needs carefully based on factors like industry, sales, and production cycles.
Similar to Where Did All My Profits Go? Mastering the Concept of Working Capital (Series: MBA Boot Camp 2020) (20)
IP-301 POST-GRANT REVIEW TRIALS 2022 - Things to Consider Before You FileFinancial Poise
This segment will delve into considerations that come into play when filing or responding to post-grant review proceedings. These considerations include issues of real party in interest, timing, and substantive arguments.
Part of the webinar series: IP-301 POST-GRANT REVIEW TRIALS 2022
See more at https://www.financialpoise.com/webinars/
This segment will discuss the statutory and procedural background of post-grant review proceedings. It will discuss the types of proceedings available and provide a high-level discussion of how the proceedings are conducted.
Part of the webinar series:
IP-301 POST-GRANT REVIEW TRIALS 2022
See more at https://www.financialpoise.com/webinars/
THE NUTS & BOLTS OF BANKRUPTCY LAW 2022: The Nuts & Bolts of a First Day HearingFinancial Poise
Even when a bankruptcy petition is the result of a soft-landing rather than a freefall, filing a chapter 11 petition is a disruptive event. To facilitate the debtor’s entry into chapter 11 with as little disruption as possible, first day motions are filed to ensure that a debtor-in-possession can minimize interruptions and continue operating its business in order to achieve its goals in chapter 11. This webinar provides an overview of the administrative and operational first day motions typically filed by chapter 11 debtors and the process for requesting a first day hearing, providing notice of the hearing, and ensuring that the hearing runs smoothly.
Part of the webinar series: THE NUTS & BOLTS OF BANKRUPTCY LAW 2022
See more at https://www.financialpoise.com/webinars/
RESTRUCTURING, INSOLVENCY & TROUBLED COMPANIES 2022: Bad Debtor Owes Me Money!Financial Poise
Sometimes it begins when a client, tenant, or customer starts to slow-pay, with the result that your accounts receivable start to accrue gradually. Other times the issue presents itself more suddenly. Either way, you find your company owed a great deal of money that looks like it may not be collected because your client/tenant/customer has filed bankruptcy, has commenced an assignment for the benefit of creditors, has been put into receivership, or is otherwise just plain insolvent. What do you do? What should you not do? The topics discussed in this webinar include the pros and cons of putting a counterparty into involuntary bankruptcy; when and how you may be able to pursue third parties (like guarantors, directors, or officers) for the amount owed; risks related to preference attack; pros and cons of sitting on a “creditors’ committee” in a Chapter 11; how to negotiate for “critical vendor” protection in Chapter 11; and practical guidance for continuing to provide goods or services to an insolvent counterparty.
Part of the webinar series: RESTRUCTURING, INSOLVENCY & TROUBLED COMPANIES 2022
See more at https://www.financialpoise.com/webinars/
We’ve all long heard about writing practices to avoid, including run-on sentences, excessive passive voice, and nominalization. This webinar not only discusses how those habits can damage briefs, but also explores a key habit brief-writers should embrace: using strong, precise verbs, which are the engine of a persuasive sentence. Panelists also exchange views about finding the most persuasive voice and tone, as well as the right temperature for rhetoric.
Part of the webinar series: PERSUASIVE BRIEF WRITING 2022
See more at https://www.financialpoise.com/webinars/
CYBER SECURITY and DATA PRIVACY 2022: Data Breach Response - Before and After...Financial Poise
You’ve received the dreaded call that your company has just suffered a data breach – what do you do next? Who do you call for help? What notification obligations do you have?
With proper preparation, you can mitigate the damage caused by this unfortunate event and put your business in a position to recover. Your company may have already implemented its information security program and identified the responsible parties, including applicable outside experts, to be contacted in the event of a breach. However, now you must call up your incident response team to investigate the extent of the breach, evaluate the possible damage to your company, and determine whether you must notify your clients, customers, or the public of the breach. This webinar will help prepare you to take action when the worst happens.
Part of the webinar series:
CYBER SECURITY and DATA PRIVACY 2022
See more at https://www.financialpoise.com/webinars/
CYBER SECURITY and DATA PRIVACY 2022_How to Build and Implement your Company'...Financial Poise
Data is one of your business’s most valuable assets and requires protection like any other asset. How can you protect your data from unauthorized access or inadvertent disclosure?
An information security program is designed to protect the confidentiality, integrity, and availability of your company’s data and information technology assets. Federal, state, or international law may also require your business to have an information security program in place.
This webinar will provide the basics of how to create and implement an information security program, beginning with identifying your incident response team, putting applicable insurance policies into place, and closing any gaps in the security of your data.
Part of the webinar series:
CYBERSECURITY & DATA PRIVACY 2022
See more at https://www.financialpoise.com/webinars/
NEWBIE LITIGATOR SCHOOL - 101 Part 3 2022 - Enforcement: Post-Judgment Procee...Financial Poise
Obtaining a final and enforceable judgment is often just the first phase of the civil litigation process; without effective enforcement and collection, a judgment is merely a piece of paper (or electronic docket entry). This webinar provides an overview of the technical, procedural and strategic considerations necessary to monetize judgments and make litigation worthwhile.
Part of the webinar series: NEWBIE LITIGATOR SCHOOL - 101 Part 3 2022
See more at https://www.financialpoise.com/webinars/
NEWBIE LITIGATOR SCHOOL - 101 Part 3 2022 -Appellate Practice- 101 Financial Poise
When is an appeal permitted and when should you take one? What rules and procedures govern appellate practice and how can you best avoid technical and procedural mistakes. How are appellate briefs different from those filed with the trial court and what are some keys to making them successful? And how can you best prepare for appellate oral argument? This webinar explores these questions and more with a panel of experienced appellate litigators.
Part of the webinar series: NEWBIE LITIGATOR SCHOOL - 101 Part 3 2022
See more at https://www.financialpoise.com/webinars/
MARKETING TIPS FOR THE NEW (OR OLD!) BUSINESS OWNER 2022: Learn How to Do Con...Financial Poise
There's creating content; then there's creating great content; and then there's creating great content that actually gets seen by the ideal audience. Each of those layers has its own unique challenges. In this webinar episode, we share insights from a variety of highly experienced content creators. Each panelist member provides their own unique spin on how to create great content that gets seen by the intended audience. By the completion of this episode, the audience member will have a clear and actionable plan on how to create outstanding content that meets their unique marketing needs.
Part of the webinar series: MARKETING TIPS FOR THE NEW (OR OLD!) BUSINESS OWNER 2022
See more at https://www.financialpoise.com/webinars/
CHAPTER 11 - INDUSTRY FOCUS 2022 - Focus on Oil and Gas Financial Poise
Although issues in oil and gas chapter 11 cases vary from case to case, there are, nonetheless, certain issues that tend to arise in most oil and gas cases. Among them: treatment of oil and gas leases, the payment of royalties, hedging agreements, and valuation. This webinar addresses such issues.
Part of the webinar series: CHAPTER 11 - INDUSTRY FOCUS 2022
See more at https://www.financialpoise.com/webinars/
BUSINESS LAW REVIEW- 2022: Selling a Business Financial Poise
A Startup is the Founders’ baby - they dream it, created it and worked tirelessly to make it successful. Deciding it may be time to sell all or part is the easy part - acknowledging and addressing the financial and emotional issues can be challenging.
Negotiating with potential buyers or investors is time intensive, to say the least. Positioning a business for a value maximizing transaction requires planning. What professionals need to be engaged? How do the parties come to a valuation? What is the profile of the likely investor or buyer? These are just some of the questions this webinar addresses.
Part of the webinar series: BUSINESS LAW REVIEW- 2022
See more at https://www.financialpoise.com/webinars/
BUSINESS LAW REVIEW- 2022: Immigration Law for Business-101Financial Poise
A basic understanding of immigration law is critical to a vast array of businesses operating in today’s economy. Foreign employees and their sponsoring companies will navigate a complex maze in the attempt to achieve the desired goals of the employee maximizing their ability to provide services and value to the company. One of various determining factors as to which pathway to attempt is whether the goal is an immigrant visa (also known as a “green card”) which may ultimately allow lawful permanent residence in the United States or a non-immigrant visa. The need for foreign labor affects various industries and applies to large segments of skilled, unskilled and semi-skilled workers in jobs ranging from farm to seasonal to high-tech. This webinar explains what businesses need to know in the current environment as well as how political and globalization issues will affect immigration laws going forward.
Part of the webinar series:
BUSINESS LAW REVIEW- 2022
See more at https://www.financialpoise.com/webinars/
NEWBIE LITIGATOR SCHOOL - Part I 2022: Working With Experts Financial Poise
This webinar provides an overview of using expert witnesses in commercial litigation. It discusses when expert testimony is commonly used, the rules governing expert disclosures and discovery such as expert reports. It covers challenging opposing experts using Daubert motions and strategies for preparing your own experts for deposition. The webinar is part of a series on litigation fundamentals aimed at new and less experienced litigators.
Executive compensation continues its movement towards performance pay as the standard. Compensation structures and proxy disclosures are more and more complex. Investors and proxy advisors continue to increase influence on compensation issues. This webinar examines executive compensation, including equity-based compensation plans and executive employment and severance agreements. The importance of disclosure, alignment of risk, and metrics is also examined. Practical guidance on pay-for-performance and supplemental pay definitions is provided. The panelists discuss the effect of the Dodd-Frank Act on executive compensation, including SEC regulations. Exchange rules are compared to applicable federal law. Best practices regarding executive compensation committees and regulatory requirements for those committees are examined. Shareholder advisory groups promulgate executive compensation related advisory policies for their institutional shareholder clients annually and these policies are also discussed. Issues regarding board composition and leadership structure issues are discussed in relation to executive compensation.
Part of the webinar series:
CORPORATE REGULATORY COMPLIANCE BOOT CAMP 2022 - PART 2
See more at https://www.financialpoise.com/webinars/
CORPORATE REGULATORY COMPLIANCE BOOT CAMP 2022 - PART 2: Securities Law Comp...Financial Poise
The Securities and Exchange Commission has been entrusted with a significant corporate compliance regulatory function, which has been expanded by seminal legislation in the recent past such as the Sarbanes-Oxley (“SOX”) and Dodd-Frank Acts. This webinar discusses board fiduciary duties and the tension between state corporate law standards and federal law. Board composition, independence, structure and processes (including best practices in regard to committees) are analyzed. Specifically, director independence is discussed as is audit committees and related requirements, regulations and exemptions. NASDAQ and the NYSE also have similar requirements for director independence and those are also discussed. The webinar also covers disclosure matters related to SOX compliance, including timing and content of an issuer's periodic disclosures. Both the legal requirements and best practices related to disclosure procedures and internal controls under SOX are examined. Means of controlling the costs of SOX, especially for smaller public companies, are also discussed, including trends in the industry related to high regulatory compliance costs. Finally, the applicability and best practices for privately held companies and SOX are considered.
Part of the webinar series: CORPORATE REGULATORY COMPLIANCE BOOT CAMP 2022 - PART 2
See more at https://www.financialpoise.com/webinars/
The deal is complete, and the parties have finished the hard work. Or have they? Integration planning turns to execution as people, process, and technology are combined once the deal is legally closed. The buyer will need to consider the purchased business or assets from the standpoint of employees, IT, customers, suppliers, and a multitude of other areas. In addition, numerous post-closing legal issues may arise, including purchase price adjustments, breaches of representations and warranties, enforcement of key negative employment-related covenants and restrictive covenants, collection of pre-closing accounts receivable, and true-ups of final financials. This episode guides listeners through the process, timing, and issues which most commonly arise after the closing of deals.
Part of the webinar series:
M&A BOOT CAMP - 2022
See more at https://www.financialpoise.com/webinars/
Although every deal is different, understanding any purchase/sale agreement will help you understand other purchase sale agreements. Stated another way, most M&A documents include a similar set of sections and use a similar vocabulary. This episode explains specific, common provisions and discusses how buyers and sellers approach these provisions differently, particularly in light of situational differences (e.g. whether the assets being bought and sold are equity of a company or the assets of a company; whether the seller is going to cease to exists or not). Topics covered will include tax issues; corporate governance; closing conditions; representations and warranties; indemnification provisions; earn-outs; restrictive covenants; antitrust; intellectual property; and employment issues.
Part of the webinar series:
M&A BOOT CAMP - 2022
See more at https://www.financialpoise.com/webinars/
Buying, selling, or merging a company typically follows a similar set of steps from deal to deal. The amount of time each step takes varies but the order of the steps is fairly uniform because the steps follow a certain logic: before the parties share meaningful information, they should sign a confidentiality agreement (a/k/a “non-disclosure agreement,” or “NDA”); once a baseline amount of information is known by the would-be buyer, it commonly presents a letter of intent or term sheet to the target or its owner, which serves as an outline for a deal but does not necessarily bind the parties to consummate the transaction; additional due diligence and the negotiation, drafting and signing of definitive documents comes next. The parties then obtain any needed regulatory and/or contractual third party approvals; followed by closing; and finally by post-closing tasks. This webinar will discuss all these steps from a macro perspective so that you can see the forest for the trees, but does not do a deep dive into any single topic. Think of this webinar as a road map or timeline for a typical deal.
Part of the webinar series:
M&A BOOT CAMP - 2022
See more at https://www.financialpoise.com/webinars/
CROWDFUNDING 2022 - Crowdfunding from the Investor's PerspectiveFinancial Poise
This webinar focuses on the opportunities that crowdfunding makes available to the investor, and how the investor should go about navigating this new world. We begin with a basic overview of the new regulatory regime, the requirements to invest, and the on-boarding process one should expect. We then dive deeper into the market opportunity, including how to access and select investments, and expectations investors should set for themselves and the projects they select. This is not intended to support any specific deal selection, but instead sheds a light upon the basic selection criteria available, the method to go about investing and what to avoid.
Part of the webinar series: Crowdfunding 2022
See more at https://www.financialpoise.com/webinars/
Executive Directors Chat Leveraging AI for Diversity, Equity, and InclusionTechSoup
Let’s explore the intersection of technology and equity in the final session of our DEI series. Discover how AI tools, like ChatGPT, can be used to support and enhance your nonprofit's DEI initiatives. Participants will gain insights into practical AI applications and get tips for leveraging technology to advance their DEI goals.
This presentation includes basic of PCOS their pathology and treatment and also Ayurveda correlation of PCOS and Ayurvedic line of treatment mentioned in classics.
This slide is special for master students (MIBS & MIFB) in UUM. Also useful for readers who are interested in the topic of contemporary Islamic banking.
How to Manage Your Lost Opportunities in Odoo 17 CRMCeline George
Odoo 17 CRM allows us to track why we lose sales opportunities with "Lost Reasons." This helps analyze our sales process and identify areas for improvement. Here's how to configure lost reasons in Odoo 17 CRM
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
What sets Denis apart is his comprehensive understanding of Business and Systems Analysis technologies, honed through involvement in all phases of the Software Development Lifecycle (SDLC). From meticulous requirements gathering to precise analysis, innovative design, rigorous development, thorough testing, and successful implementation, he has consistently delivered exceptional results.
Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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Training: ISO/IEC 27001 Information Security Management System - EN | PECB
ISO/IEC 42001 Artificial Intelligence Management System - EN | PECB
General Data Protection Regulation (GDPR) - Training Courses - EN | PECB
Webinars: https://pecb.com/webinars
Article: https://pecb.com/article
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LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UPRAHUL
This Dissertation explores the particular circumstances of Mirzapur, a region located in the
core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
environment for investigating the changes in vegetation cover dynamics. Our study utilizes
advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
of extensive research and worry. As the global community grapples with swift urbanization,
population expansion, and economic progress, the effects on natural ecosystems are becoming
more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
these activities. As the most crucial natural resource, its utilization by humans results in different
'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
centuries, evolving its structure over time and space. In the present era, these changes have
accelerated due to factors such as agriculture and urbanization. Information regarding land use and
cover is essential for various planning and management tasks related to the Earth's surface,
providing crucial environmental data for scientific, resource management, policy purposes, and
diverse human activities.
Accurate understanding of land use and cover is imperative for the development planning
of any area. Consequently, a wide range of professionals, including earth system scientists, land
and water managers, and urban planners, are interested in obtaining data on land use and cover
changes, conversion trends, and other related patterns. The spatial dimensions of land use and
cover support policymakers and scientists in making well-informed decisions, as alterations in
these patterns indicate shifts in economic and social conditions. Monitoring such changes with the
help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
5. Disclaimer
The material in this webinar is for informational purposes only. It should not be considered
legal, financial, or other professional advice. You should consult with an attorney or other
appropriate professional to determine what may be best for your individual needs. While
Financial Poise™ takes reasonable steps to ensure that information it publishes is accurate,
Financial Poise™ makes no guaranty in this regard.
5
6. Meet the Faculty
MODERATOR:
Chris Cahill - L&G Law Group LLP
PANELISTS:
John Levitske - Ankura Consulting Group, LLC
Michael Schwarzmann - Independent CRO and Restructuring Advisor
Ken Yager - Newpoint Advisors Corporation
Kim Lorenz - Lorenz Sound LLC
6
7. About This Webinar - Where Did All My Profits Go?
Mastering the Concept of Working Capital
Stated simply, Working Capital = Current Assets - Current Liabilities. This equation helps a
company (and its financing sources) understand whether it has enough short term cash
inflows to cover its short term cash outflows, also referred to as liquidity. But it’s not as simple
as that. Working capital is the center of cash flow, which is the lifeblood of any
business. Understanding the various parts of working capital will better enable you to deploy
it for your business. In this webinar you will learn what parts of the balance sheet make up
working capital and what actions cause the most problems with cash flow. We also look at
best practices for managing working capital and avoiding diminished cash flow, accelerated
taxation, and lessened access to financing.
7
8. About This Series
MBA Boot Camp 2020
“If you don’t know your numbers, you don’t know your business.” This common refrain
applies equally to attorneys and other business consultants. This webinar series is designed
for you if you are a startup founder, business owner, executive, investor, attorney, or
consultant who, though not a finance or accounting professional, and you find yourself
needing a greater understanding of finance and accounting. This series will not make you an
expert but it will make more cogent and productive your conversations with experts. We
proceed through review of concepts illustrated by examples, anecdotes, and case studies.
Each Financial Poise Webinar is delivered in Plain English, understandable to investors, business owners, and
executives without much background in these areas, yet is of primary value to attorneys, accountants, and other
seasoned professionals. Each episode brings you into engaging, sometimes humorous, conversations designed to
entertain as it teaches. Each episode in the series is designed to be viewed independently of the other episodes so that
participants will enhance their knowledge of this area whether they attend one, some, or all episodes.
8
9. Episodes in this Series
#1: EBITDA and Other Scary Words
Premiere date: 1/23/20
#2: How to Read a Balance Sheet – And Why You Care!
Premiere date: 2/20/20
#3: The KPI- Cash Flow Modeling and Projections
Premiere date: 3/19/20
#4: Where Did All My Profits Go? Mastering the Concept of Working Capital
Premiere date: 4/16/20
9
10. Episode #4
Where Did All My Profits Go? Mastering the Concept of
Working Capital
10
11. Concepts Covered in Past Episodes of this Series
• EBITDA & Other Scary Words
• Balance Sheet Understanding & Analysis
• Key Performance Indicators (“KPI”)
12. Introduction to Working Capital
• What is Working Capital?
Working Capital = Total Current Assets - Total Current Liabilities
Positive working capital implies that a company is able to pay off its short-term
liabilities
Negative working capital implies that a company is unable to meet short-term
liabilities with current assets
Sometimes also referred to as “Circulating Capital” or “Short Term Capital”
13. Working Capital Vs. Fixed Capital
• Fixed Capital = required for establishing a business
• Working Capital = required to use a business’s fixed assets
14. What are Current Assets?
• Cash and other assets that can be converted into cash easily, or within one year or
accounting period
• Examples:
Cash
Receivables
Inventory
Marketable securities
15. What are Current Liabilities?
• Obligations requiring cash outflows due within one year or accounting period
• Examples:
Accounts payable
Accrued expenses such as salary & wages and taxes
Interest and debt due within one year
Some warranty liability
o If a company offers a multi-year warranty, the bulk of the warranty liability
would probably be a long-term liability
Unearned revenues
16. The Importance of Working Capital
• Maintaining Liquidity
Understanding Working Capital is key to preserving company’s liquidity
• Lender & Investor relations
Working Capital is used by current or potential lenders & investors to measure
company’s strength and creditworthiness
17. Working Capital and the Operating Cycle
• A company’s operating cycle is understood as the time it takes to convert raw
materials or inventory into cash
• Working Capital is directly affected by company’s operating cycle
19. Gross Working Capital
• A broad measurement
• The sum of all current assets (assets that are convertible to cash within a year or
less)
• It helps in determining return on investment in working capital and in providing the
correct amount of working capital at the right time
20. Net Working Capital
• The sum of all current assets minus the sum of all current liabilities
• Helpful when tracked on a trend line to show gradual improvement or decline
21. Net Working Capital - Potential Pitfalls
• Anomalies
Isolated measurements may reflect anomalies in working capital which obscure
operations
o e.g., net working capital measured at a point in which a large, one-time
account payable is unpaid may creating the appearance of smaller net
working capital
22. Net Working Capital - Potential Pitfalls
• Lines of Credit
Despite having negative net working capital, the company may still have line of
credit capable of covering short-term funding shortfalls
A more nuanced view may come from plotting net working capital against the
remaining available balance on the line of credit
If the line of credit is nearly used up, liquidity problems are more likely
23. Net Working Capital - Potential Pitfalls
• Liquidity
Current assets are not necessarily very liquid
May be unavailable to pay down short-term liabilities.
o e.g., inventory may be quickly convertible to cash only at steep discount;
accounts receivable may not be collectible in the short term
24. Types of Working Capital - Basis of Time
• Permanent/Fixed Working Capital
Regular Working Capital
Reserve Working Capital
• Temporary/Variable Working Capital
Seasonal Working Capital
Special Working Capital
25. Permanent/Fixed Working Capital
• Minimum sufficient working capital regardless of fluctuation in business activity
• “Permanent” is a misnomer
Permanent/Fixed Working Capital is not fixed forever
Permanent/Fixed Working Capital is measured annually and influenced by
company’s growth or contraction over a given year
• Regardless, Permanent/Fixed Working Capital helps a company when make
decisions relating to the financing mix needed to cover working capital gaps
• Permanent/Fixed Working Capital can be financed with long term sources of
funding, such as equity, debenture, and long-term loans
Long-term sources of financing are usually cheaper than short term sources
26. Types of Permanent/Fixed Working Capital
• Regular Working Capital: permanent working capital that is required in the
company’s ordinary operations for working capital cycle to flow smoothly
• Reserve Working Capital: the working capital cushion the company must maintain
above regular working capital for contingencies that may arise due to unexpectedly
27. Temporary/Variable Working Capital
• The difference between Net Working Capital and Permanent Working Capital
• Stated another way: the temporary fluctuation of Net Working Capital over and
above Permanent Working Capital, based on additional Working Capital
requirements arising from demand for product during a specific period or at a
specific time
28. Types of Temporary/Variable Working Capital
• Seasonal Working Capital
Fluctuation in Net Working Capital caused by effect of season
o Examples: agricultural products, school or sports uniforms, audit deadlines,
local festivals
• Special Working Capital
Fluctuation in Net Working Capital caused by special unforeseen event
o Examples: extreme weather conditions (extreme heat or cold), floods,
famine, sudden change in government policy, pandemic
29. Why Classify Temporary/Variable Working Capital?
• Temporary Working Capital is preferably financed on a short-term basis
• Though long-term financing is less expensive, short term financing may better serve
as Temporary Working Capital because long term financing may not be easily
redeemed
• Short term financing has time flexibility, and can be used and repaid when a
purpose is served
• Example: cash credit limit is extended by lender. Interest accrues on amount used
for the period of use only. Idle cash can pay off outstanding short term financing and
the company can save on interest costs over the long term
30. Forecasting
• Companies carefully measure relevant Working Capital history in order to project
accurately future Working Capital needs and determine potential financing needs
• A correctly measured Working Capital history helps a company forecast its growth
• A company better understands its working capital trends by analyzing:
Days Sales Outstanding as a measure of how many days, on average,
Accounts Receivable are paid
Inventory Turns as a measure of how quickly, on average, Inventory is sold
Days Payables Outstanding as a measure of how many days, on average,
Accounts Payable are paid
31. Working Capital Management Policies
• Companies may employ specific policies governing Working Capital Management to
maintain satisfactory levels of Working Capital
• Considerations:
Profitability, Risk, & Liquidity
Composition & Level of Current Assets
Composition & Level of Current Liabilities
Industry
32. How Payment Terms Can Affect Working Capital
• Positive impacts on working capital
Shorter customer terms
Longer vendor terms
Just-in-time vendor deliveries
Low minimum vendor order quantities
• Negative impacts on working capital
Longer customer terms
Shorter vendor terms
Long vendor lead times
High minimum vendor order quantities
34. About The Faculty
Chris Cahill - ccahill@lgcounsel.com
Mr. Cahill is Head of the Bankruptcy and Restructuring Practice Group at L&G Law Group
LLP, in Chicago, Illinois. He guides secured lenders, creditors, debtors, creditors’
committees, potential purchasers and others through bankruptcy cases, out-of-court
workouts, assignments for the benefit of creditors, and receiverships. Mr. Cahill has
substantial mega-case experience representing very large debtors, and counsels and litigates
on behalf of manufacturers and secured lenders in large and middle-market cases.
Mr. Cahill also publishes frequently and speaks regularly on commercial insolvency
issues. He is an executive editor of Commercial Bankruptcy Litigation, 2d Edition (Jonathan
P. Friedland, Elizabeth Vandesteeg & Christopher M. Cahill eds., 2020) and is the host of
Financial Poise Radio, a periodic podcast for investors and other curious persons,
on www.financialpoise.com.
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35. About The Faculty
John Levitske - John.Levitske@ankura.com
John Levitske is a Senior Managing Director at Ankura, focused on business valuation and complex financial
disputes. He has served as a senior advisor to companies, owners, executives, and legal counsel in business
disputes, shareholder disputes, and M&A transactions regarding issues of valuation, finance, damages, and
accounting. John is based in Chicago. With more than two decades of Big Four public accounting and
international consulting experience, John is seasoned in business valuation, financial analysis, economic
damage quantification, forensic accounting, retrospective solvency analysis, and post-merger & acquisition
accounting calculations. He handles appraisals of healthy and distressed companies for buyouts of shareholders
and creditors, transaction planning, estate and gift taxation, financial accounting, bankruptcy proceedings, and
litigation disputes. John has provided consulting and expert witness testimony services and has served as a
neutral party in arbitration and mediation. He has testified as an expert witness in the US and Europe in
depositions, hearings, bench and jury court trials, and domestic and international arbitration (ICC, SCC, AAA,
JAMS, FINRA, and ad hoc arbitrations) and has served as a neutral arbitrator. In addition, he has rendered
binding decisions on disputed matters.
To read more, go to https://www.financialpoise.com/financialpoisewebinars/faculty/john-levitske/.
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36. About The Faculty
Michael Schwarzmann – michaelschwarzmann@yahoo.com
Michael Schwarzmann has over 20 years’ experience helping identify opportunities to create value for his clients.
I have extensive experience working with established companies when they encounter financial difficulties by
assisting them in developing solutions to address short term cash needs and longer term profitability. My
process includes helping to identify cost savings and value capture scenarios by analyzing historical financial
performance along with current operations and projecting optimizing strategies. Utilizing weekly and monthly
cash flow statements, budgets, and forecasts, I utilize a focused, data driven approach to identifying
opportunities to increase company profitability. Through a broad review of financial, operational and strategic
performance, I help guide companies to increased profitability. Working across the organization, vertically and
horizontally, uncovers additional solutions and generates greater buy-in of the goals, objectives and action plan,
all of which are critical to maximize the impact of proposed changes. I utilize my legal knowledge to seamlessly
work with counsel to identify and address legal issues in a more cost effective manner.
I have guided the development and evaluation of business plans and formulated successful strategies to
preserve or improve asset values. I am a consensus builder. Industry experience includes: health care,
manufacturing, agricultural, construction, restaurants and franchising, energy and travel.
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37. About The Faculty
Ken Yager – KYager@newpointadvisors.us
Ken has 25 years of executive leadership experience in stakeholder communication. Mr. Yager regularly takes
on profit and loss and risk-management responsibility for cash-constrained companies in growth, leveraged-
buyout and turnaround situations. He also has successfully worked on implementing dozens of initiatives
involving, operations and project management, team building, marketing, and sales and joint-venture
management. He is a fierce advocate for capital preservation and saving jobs. Ken has worked with clients in a
variety of industries in over 100 engagements. Prior to Newpoint Advisors, Mr. Yager was a Principal at
MorrisAnderson, a national turnaround management firm focused on assisting companies deal with severe
liquidity issues and insolvency. Mr. Yager previously held positions at Newpoint Ventures, a company dedicated
to revitalizing middle-market companies through new management and the introduction of low-cost employee
leveraging tools; Equity Sponsor Business Development at Bank of America; The Assurance practice of Coopers
& Lybrand and the Capital Markets Division of Salomon Brothers. Ken earned a Bachelor’s degree in
Management with majors in Finance and Accounting from Tulane University, A.B. Freeman School of Business,
and received a Master of Management degree from J.L. Kellogg Graduate School of Management. Ken is a
member of the Chicago/Midwest chapter of the Turnaround Management Association (TMA) and was on the
International Board as the Vice President of Education and chairs the Education Oversight Committee. Member
of American Bankruptcy Institute.
37
38. About The Faculty
Kim Lorenz – kimsound@msn.com
After successfully starting and running two corporations for over 20 years, then selling both to Fortune
500 firms, Kim joined World Vision as a volunteer to initiate global collaborations between Rotary and
World Vision. His focus has been on successfully implementing Humanitarian and development work with
this global NGO leader World Vision. The work focuses on large Water, Sanitation and Hygiene projects
(WASH) as well as Economic Development work alongside Rotary Clubs and The Rotary Foundation
doing this work where needed most in developing countries.
To date some $20 million in Water, Sanitation and Hygiene as well as Micro Finance/Economic
Development projects have been completed in these collaborations.
Globally, World Vision has 47,000 'local' staff in close to 100 countries carrying out over $2 billion annually
in humanitarian relief and development work.
Kim has a new book about to be published titled Tireless, Key Principles that Drive Success Beyond
Business School.
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39. Questions or Comments?
If you have any questions about this webinar that you did not get to ask during the live
premiere, or if you are watching this webinar On Demand, please do not hesitate to email us
at info@financialpoise.com with any questions or comments you may have. Please include
the name of the webinar in your email and we will do our best to provide a timely response.
IMPORTANT NOTE: The material in this presentation is for general educational purposes
only. It has been prepared primarily for attorneys and accountants for use in the pursuit of
their continuing legal education and continuing professional education.
39
40. About Financial Poise
40
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