Accounts and finance

Table of Contents

1. Topic pack - Accounts and finance - introduction
2. 3.1 Sources of finance - notes
3. 3.1 Sources of finance - questions
4. 3.2 Investment appraisal - notes
5. Investment appraisal
6. 3.2 Investment appraisal - questions
7. 3.3 Working capital - notes
   1. Working capital
   2. Working capital cycle
   3. Cash flow forecasts
   4. Profit and cash
   5. Cash flow forecasts
   6. An overtrading scenario
   7. Management of working capital
8. 3.3 Working capital - questions
9. 3.4 Budgeting - notes (HL only)
10. 3.4 Budgeting - questions
11. 3.5 Final accounts - notes
12. 3.5 Final accounts - questions
13. 3.5 Final accounts - simulations and activities
14. 3.6 Ratio analysis - notes
15. 3.6 Ratio analysis - questions
16. 3.6 Ratio analysis - simulations and activities
17. Printable version

Working capital cycle

The accounting definition of working capital is:

There is, in most businesses, a significant delay between paying out for the raw materials and labour required to produce the goods or services and the receipt of cash from the sale of the goods. This means that for most businesses their working capital (their net current assets) needs to be very carefully managed.

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• Working capital cycle