What are the factors in a business that are going to make turning an item into cash quickly critical, and are there factors that make turning your capital into cash quickly less important?
What are the factors in a business that are going to make turning an item into cash quickly critical, and are there factors that make turning your capital into cash quickly less important?
What are the factors in a business that are going to make turning an item into cash quickly critical, and are there factors that make turning your capital into cash quickly less important?
When it comes to working capital, there are several things to manage. From the cash conversion cycle to the floats for disbursements and collections to the age of your accounts receivable and cash discounts on both your AR and AP; it’s all about the cash. What are the factors in a business that are going to make turning an item into cash quickly critical, and are there factors that make turning your capital into cash quickly less important?
Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.
Expert Solution
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ANSWER:-
The factors that might make turning an item into cash quickly critical are as follows:
- The company might undergo a slump in sales and the cash flow from customers might reduce. However, operating expenses might require the company to convert its items into cash.
- A lucrative investment option which requires cash investment.
The factors which will make turning capital into cash quickly less important are as follows:
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