Working capital cycle
- difference between firm paying for cash for costs and its costs for production
- Also called net current assets or circulating capital ⇒ working capital
- cash available to a business for daily operations Current assets - short term business belongings that are easy to turn into cash (see 3.4 Finance Accounts)
- Cash
- Stock
- Debtors Current liabilities - short term loans
- Bank overdrafts (take more money than in their bank account. Short term and high interest)
- Trade creditors (usually suppliers, buy now pay later)
- Short term loans Working capital cycle: time elapsed between organization paying for production of product/service, and receiving cash from the customer
- Leasing a vehicle has a long working capital cycle, for example (DOES IT THOUGH)
