GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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There is deterioration in the management of work capital of XYZ Ltd. What does it refer to?
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That sales has decreased
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That the profitability has gone up
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That capital employed has reduced
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That debtors collection period has increased
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Explanation:
Detailed explanation-1: -“working capital” is the NET amount tied up in Stock & Debtors (which have cost you cash) less the amount you owe to creditors (which is free until you pay it).
Detailed explanation-2: -Common working capital issues + To grow your business, as you’ll incur costs before you receive cash for your products or services. Lack of visibility on cash and working capital performance across the organisation. Lack of cash awareness across departments and geographies.
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