Gross working capital refers to a company's current assets minus its current liabilities. The term is used to describe the amount of a company's cash and other liquid assets that are available to meet its short-term obligations.
A company's current assets include cash, accounts receivable, inventory, and other assets that can be converted into cash within one year. Current liabilities are debts that are due within one year, such as accounts payable, wages, and taxes.
Gross working capital is important because it represents the funds that a company has available to pay its short-term obligations. It is also a key metric in financial analysis, as it can give insights into a company's liquidity and solvency. Which of these will not be included in gross working capital? The answer is "Inventory."
What are the six basic components of working capital explain? The six basic components of working capital are:
1. Accounts receivable
2. Inventory
3. Accounts payable
4. Accrued expenses
5. Short-term investments
6. Cash
1. Accounts receivable are the amounts owed to a company by its customers for goods or services that have been delivered or performed.
2. Inventory is the stock of goods or materials that a company has on hand, either for sale or for use in the production of other goods and services.
3. Accounts payable are the amounts owed by a company to its suppliers or creditors for goods or services that have been received.
4. Accrued expenses are the amounts that a company has incurred but has not yet paid for, such as salaries, rent, or utilities.
5. Short-term investments are the funds that a company has invested in assets that are expected to be sold or converted into cash within one year.
6. Cash is the most liquid of all the assets, and includes currency, coins, and balances in checking and savings accounts. What is meant by gross working capital Mcq? Gross working capital refers to the total current assets of a company, including cash, inventories, and accounts receivable. It is a measure of a company's short-term financial health and its ability to meet its current obligations. What are the three 3 major types of cash flow? There are three major types of cash flow: operating cash flow, investing cash flow, and financing cash flow.
Operating cash flow is the cash flow generated by a company's normal business operations. This includes cash receipts from sales of goods and services, as well as cash payments for expenses such as rent, salaries, and taxes.
Investing cash flow is the cash flow generated by a company's investments, such as the purchase or sale of equipment or real estate.
Financing cash flow is the cash flow generated by a company's financing activities, such as the issuance of new debt or equity, or the repayment of existing debt.
What are the 2 components of working capital?
There are two components of working capital: current assets and current liabilities.
Current assets are assets that will be turned into cash within one year. They include cash, accounts receivable, inventory, and short-term investments.
Current liabilities are obligations that will be due within one year. They include accounts payable, short-term debt, and accrued expenses.