If current ratio and net working capital given how to find current asset
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Net working capital represents the cash and other current assets, after covering liabilities, that provide a company with the liquidity to invest in activities associated with operating and growing a business.
Many people use net working capital as a financial metric to measure the cash andoperating liquidity position of a business. It consists of the sum of all current assets and current liabilities. Net working capital measures the short-term liquidity of a business, and can also indicate the ability of company management to utilize assets in an efficient manner.
The amount of net working capital a company has available can also be used to determine if the business can grow quickly. With substantial cash in its reserves, it may have enough to scale the business rather fast. Conversely, if the business has very little in cash reserves then it's highly unlikely that the company has the resources to handle fast-paced growth.
Management, vendors, and general creditors watch a company’s net working capital because it provides a snapshot at any given time of the firm's short-term liquidity and ability to pay off its current liabilities with current assets.
hope it helps you friend.
@ sk
Many people use net working capital as a financial metric to measure the cash andoperating liquidity position of a business. It consists of the sum of all current assets and current liabilities. Net working capital measures the short-term liquidity of a business, and can also indicate the ability of company management to utilize assets in an efficient manner.
The amount of net working capital a company has available can also be used to determine if the business can grow quickly. With substantial cash in its reserves, it may have enough to scale the business rather fast. Conversely, if the business has very little in cash reserves then it's highly unlikely that the company has the resources to handle fast-paced growth.
Management, vendors, and general creditors watch a company’s net working capital because it provides a snapshot at any given time of the firm's short-term liquidity and ability to pay off its current liabilities with current assets.
hope it helps you friend.
@ sk
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