How do you determine the working capital needs of a parts stor
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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How do you determine the
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Working capital is the amount by which the current assets exceed current liabilites. In short we call it owners contribution in the business for current assets . Current assets include inventory , acconts receivables, notes receivables , cash at bank and cash in hand. Current liabilities include accounts payables , notes payables , unpaid expenses etc.
Generally a parts store menas auto part stores which means a small or medium sized business. It is the life blood of the business and shortage of it may lead the business towards sickness. So we can determine the need of working capital of a parts store as under ---
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