All financial ratios and data compiled in the template.

Builder – 5

Working Capital:

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Working capital is the difference between a company’s current assets, such as cash, accounts receivable (customers’ unpaid bills) and inventories of raw materials and finished goods, and its current liabilities, such as accounts payable. Sometimes it is also known as a net working capital (NWC).

It is a measure of a company’s liquidity and refers to the difference between operating current assets and operating current liabilities. also, in other hands if I say that pointwise –

  1. A company has negative working capital If the ratio of current assets to liabilities is less than one.
  2. Positive working capital indicates that a company can fund its current operations and invest in future activities and growth.
  3. High working capital isn’t always a good thing. It might indicate that the business has too much inventory or is not investing its excess cash

We can calculate the working capital by following the below formula-

Working capital = Current Assets – Current Liabilities

An example based on the builder template for both the companies

  • Example based on the Microsoft balance sheet-
Over that past few Modules, you have analyzed the financial ratios/data for two different organizations, Microsoft and Apple. For the final paper, you will prepare a formal report that compares and co 1
Over that past few Modules, you have analyzed the financial ratios/data for two different organizations, Microsoft and Apple. For the final paper, you will prepare a formal report that compares and co 2

Conclusion: as per the stats from the apple and Microsoft , the apple is better than Microsoft because it working capital is low to Microsoft and it means that Microsoft WC has too much inventory .

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