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Managing Revenue and Working Capital to Avoid Factoring in Health Organization...Managing Revenue and Working Capital to Avoid Factoring in Health Organization
Health organizations sometime run into financial problems, while they need some cash to pay their creditors or recurrent expenditures. These situations arise when debtors to the health organization tend to pay their invoices at a later date after being sent invoices while debtors require payment immediately after supplying products to the organizations. The health organization might result to factoring where it cashes the invoices earlier before their payment date with factoring offices. The risk of this mode of getting cash inflow is that the organization will lose a percent of the invoiced amount to the...
4 Pages(1000 words)Essay
Working capital...method works around the principle that goods acquired more recently are more expensive, meaning income tax is lower, COGS is increased and decreases net profit. Record keeping may also be easier using LIFO, because goods are sold from the earliest piece of inventory there will be less unsold goods to keep a record of. In FIFO, the earliest goods may stay in the inventory for many years and therefore increases the need for record keeping from an early date. Goods from a number of years ago (as found in FIFO) may also cause the need to record strange fluctuations in cost of goods because their purchasing price may be radically different from the present day. 2. Depreciation Depreciation is the decrease in cost of assets....
3 Pages(750 words)Assignment
Working capital...?The short term assets and liabilities of a company i.e. Current Assets and current liabilities are an important determinant of a company's operational performance. Hence a company should pay a lot of attention to managing its current assets and current liabilities in order to remain in the business in a profitable manner. Companies that successfully manage its working capital do not face liquidity issues and in turn can focus on other aspects of the business (Investopedia, 2013) . Positive working capital is imperative for a company to ensure that it sustains its operations. Working capital of a company...
3 Pages(750 words)Essay
Working capital...INTRODUCTION Working capital(Mcmenamim,1999) is defined as the difference between total assets and total liabilities. Working capital is one ofthe financial statement ratios that users of the financial statements analyse to determine whether the business is going on a straight an beautiful path of continuous net income for the past year or years of operation.
The working capital(Aryeetey,1998) is also one of the many financial management tools used by the financial statement users to determine whether the business will continue to survive in the near or even far away future years. Liquidity is described as how "cash"...
13 Pages(3250 words)Essay
Managing Working Capital: It depends upon the type of business...Managing Working Capital Working Capital management ‘is to manage each of firm’s current assets and current liabilities to achieve a balance between profitability and risk that contributes positively to the firm’s value. (Lawrence J Gitman, page 628)1 For attaining such a balance between profitability and risk, the nature of business plays a decisive role. Profitability is the result of exploitation of assets to produce operative activities of the company so that revenue can be increased at as much decreasing costs as possible. On the other hand firm’s short term risks are that firm will not be able to meet its short term...
8 Pages(2000 words)Essay
Working Capital...Working Capital Management: It involves the relationship between firm’s short term assets and short term liabilities. Aim of working capital is to ensure firms ability to satisfy its maturing short term debts and upcoming operational expenses. Working capital management involves the management of inventory, accounts receivables and payables and cash. Every organization irrespective of its size and nature of the business in which it is operating requires necessary amount of working capital. Efficient maintenance of working...
2 Pages(500 words)Assignment
WORKING cAPITAL...much justified in their demand for tighter credit policy, because current loose credit policy is affecting overall profitability of the firm, so in order to meet overall strategic goals of the firm tighter credit policy is now necessary for the firm.
Question #3
What is the amount of annual expense to the firm as a result of the delay in collections? What other risks do such delays entail?
Other Risks such Delays Entail:-
1. Higher level of accounts receivables causes higher accounts receivable management and collection costs.
2. It increases the risk of higher late payment expenses.
3. Higher risk of increase in bad debts.
4. Higher risk of return of goods.
Question #4
Calculate the cost of foregoing the 2% cash...
5 Pages(1250 words)Case Study
Managing Working Capital...Managing Working Capital A healthcare organization such Greenville Hospital System Medical Center (GHS) in South Carolina is complex in the sense that its activities are not merely about service delivery but it also involve daily financial management work entailed such as the collection of payment, cost accounting, and so forth. Working capital management is an important element in this respect because it is crucial in successful organizational operations. Such management covers the interaction of the assets and liabilities, which are classified in two departments: the gross...
3 Pages(750 words)Essay
Working Capital...reflect the potential liability of revenues and not the actual liability and are represented as current liabilities and incorporated within the working capital calculations.
Prepaid and Deferred Expenses cannot be easily liquidated
The problem in determining company liquidity position in times of additional cash requirements arises when the company needs additional cash to manage its operational requirements. In such an event it is difficult to liquidate Prepaid and Deferred Expenses. These assets are non tangible and do not provide much support even in case of borrowing for short terms. Hence Prepaid and Deferred Expenses are illiquid assets that should be eliminated from the...
8 Pages(2000 words)Coursework
Managing Working Capital...Managing Working Capital al Affiliation) According to Syndicate clinic, working capital is the difference betweenthe current liabilities (CL) and the subsequent current assets (CA). The working capital of Syndicate clinic measures the amount of the liquid assets available to the company and available in developing the clinic (Gapenski, 2012). The working capital of Syndicate Company can have either a positive effect or a negative feedback, depending on the amount of debt that the clinic owes its creditors. Generally, Syndicate Company has more working...
2 Pages(500 words)Research Paper
