w3d1 - Copy.docx - Read the journal article Businesses...

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Read the journal article, “Businesses Seeking Working Capital-Survey.” Based on the information presented in the article, discuss the following: •How should a business use working capital analysis? Working capital measures the liquidity of a business, to find the amount it is calculated assets less liabilities. The concept of working capital is to fund typical daily operations of a business. “So in addition to receivables, it could cover expenses such as payroll and the costs of procuring, storing and managing inventory” (Biery, 2013, para. 2). When a business has more assets than liabilities, they are in the green and positive. However, when current assets are less than liabilities the company will be in the red, or negative. What this means is that the company does not have enough liquid assets to pay off liabilities when they come due. A business should make sure to never have more liabilities than assets and to always keep a steady and comfortable amount of working capital on hand. When a company is waiting on receipt
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