Working Capital

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Across
  1. 2. _______Working Capital is a status of excess of current assets over current liabilities which helps in finding out firm’s capability to meet its short-term liabilities as well as indicates the financial soundness of the enterprise.
  2. 4. This is a one of a working capital approach which is also called as matching approach. Under this approach, the funds for acquiring fixed assets and permanent current should be acquired with long term funds and for temporary working capital short term funds should be used.
  3. 6. Mr. Ram owns HAT Ltd. and following is the items on his company’s balance sheet (In lacks): Liabilities-Equity 15, Preference Share 7, Creditors 3, Bills Payable 3 / Assets-Plant 10, Receivables 2, Bank 9. Find out the working capital.
  4. 7. Working capital ratio is a liquidity ratio that measures a firm’s ability to pay off its current liabilities with current assets. The working capital ratio also called as a current ratio, indicates whether a company has enough ____________assets to cover its short-term debt. An ideal working capital ratio is considered to be between 1.2 and 2.0
  5. 9. _______ inventory follows a “pull” system where they ensure that the components used in creating finished goods are delivered to the production area exactly on time. Doing so eliminates a considerable amount of investment in inventory, thereby reducing the working capital needs of a business.
  6. 10. The Accounting Bulletin No. 30 issued by the Committee on Accounting Procedure of American Institute of Accountants in the year 1947 recommended__________ as the standard accounting period. This decision faced a lot of criticism due to the different accounting years followed by different industries.
  7. 11. He is one of the first person to define working capital management. He defined it as "the amount of money or money equivalent required to finance a company’s' operations". This definition was coined in the year 1918.
  8. 12. This refers to the average period of time required for a business to make an initial outlay of cash to produce goods, sell the goods, and receive cash from customers in exchange for the goods. It is used to estimate the amount of working capital that a company will need in order to maintain or grow its business.
  9. 15. _______ era is the period extending from 1900-1940s which saw development in research activities in the field of working capital management.
  10. 16. In 1947, the Committee on Accounting Procedure of American Institute of Accountants issued the Accounting Bulletin No.______ which defined working capital and classified the operating cycle.
Down
  1. 1. This is a type of working capital, also called as Reserve Working Capital, refers to the short-term financial arrangement made by the business units to meet uncertain changes or to meet uncertainties. This type assumes the uncertainties of market and use reserve working capital to meet the uncontrollable risks.
  2. 3. It is an integral part of the company’s current assets and working capital which refers to the goods and materials that a business holds for the ultimate goal of resale. In other words, it is the term for the goods available for sale and raw materials used to produce goods available for sale.
  3. 5. It is a type of a working capital where it is also called as Fixed Working Capital. It refers to the minimum amount of all current assets that is required at all times to ensure a minimum level of uninterrupted business operations. Under this type, it is believed that there is a positive correlation between the size of the business and the amount of this.
  4. 8. This approach suggests that in addition to fixed assets and permanent current assets, even a part of variable current assets should be financed from long-term sources. This conceptual way of approach enables the firm to absorb day to day risk and assure long term financing covers more than the total requirement of capital.
  5. 13. This refers to incomings and outgoings of cash, representing the operating activities of an organization. In accounting sense, this is the difference in amount of cash available at the beginning of a period (opening balance) and the amount at the end of that period (closing balance).
  6. 14. This is an indicator which shows the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price. In simple words, this refers to how easily assets can be converted into cash.