It is an important part of enterprise financial management, which requires mastering the management methods of cash, accounts receivable, inventory and other major liquidity items in order to save and rationally use liquidity, speed up liquidity turnover, improve efficiency and reduce risks.
Working capital refers to the working capital necessary for purchasing raw materials, fuel and paying wages and other operating expenses for normal production and operation after the project is put into production.
Liquidity = current assets-current liabilities.
Current assets = accounts receivable+prepayments+cash+inventory.
The importance of working capital is that every turnover can generate operating income and create profits.
Therefore, the turnover of working capital is the direct creator of enterprise surplus. The following is a case study: the enterprise invested $65,438+00 and recovered $65,438+02 in cash through business activities. After deducting $65,438+00, there is still a surplus of $2. Therefore, every turnover of working capital can create a profit of $2. Where there is turnover, there are profit opportunities. Therefore, it can be said that every turnover of working capital directly creates the surplus of the enterprise.
Extended data
Liquidity management requirements
1, not only to ensure the needs of production and operation, but also to save and rationally use funds.
2. To manage funds, we should manage assets, and assets should manage funds, fund management and asset management.
3. Ensure the combination of capital use and material movement, adhere to the consistency of money and goods, and abide by the settlement discipline.
4, liquidity can only be used for the needs of production and operation turnover, shall not be used for capital construction and other expenses.
Current assets refer to the physical part of working capital and are the main content of state property. It is a physical product that quits the production process at a certain point in time but does not enter the consumption field and temporarily quits the production process, and will continue to play a role as the final product in future production.
The main difference between it and working capital is the different coverage. Liquidity includes a wide range, which is the monetary expression of current assets plus financial assets. Current assets include important current assets, excluding financial assets such as cash on hand and bank deposits.
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