Capital management
Go through all the links above and answer the below scenario
Close to 50% of the typical industrial and retail firm’s assets are held as working capital. Many newly minted college graduates work in positions that focus on working capital management, particularly in small businesses in which most new jobs are created in today’s economy.
To prepare for this Discussion: Shared Practice, select two of the following components of working capital management: the cash conversion cycle, the cash budget, inventory management, and credit policies. Think about scenarios in which your selected topics were important for informing decision making. Be sure to review the video links above and conduct additional research using academically reviewed materials, and your professional experience on working capital concepts to help develop your scenarios. Support your discussion with appropriate examples including numerical examples as necessary.
Atleast 3 references
No Plaigirism
Atleast 1000 words.
Answer preview
One of the scenarios in which the cash budget is crucial for informed decision-making is when developing short-term and long-term plans for the business. A cash budget is an important tool when making decisions regarding short-term and long-term plans by providing the firm’s current position to enable planning for future plans (Fatimatuzzahra & Kusumastuti, 2016). The cash budget provides a clear picture that helps the management see the plans that would be realistic for the business. It reveals the areas that the business can cut its expenditure to facilitate undertaking long-term projects. Therefore, the cash budget here is important in helping decision-makers avoid embarking on short-term and long-term plans beyond the means of the firm. When a firm is planning its growth, the cash budget is also important in making informed decisions by facilitating decision-makers to watch the firm’s bottom line and its plan to increase its income to meet its future bottom line.
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Capital management
