Question and answer
What may happen if an organization neglected to manage its working capital?
Insufficient Inventory Working capital is especially important for businesses that sell products because they need a well-stocked inventory. [ If your working capital is low, you may not have enough cash flow to replenish your inventory before running out of products. In such a case, client satisfaction and sales will suffer. On the other hand, organizations that mainly provide services may have
to hold little or no inventory and can operate with less working capital. Low Liquidity If your working capital is too low, the smallest emergency or unexpected expense can leave your business with no liquidity. This means you may not have enough cash on hand to pay for wages, utility bills and other regular running expenses. Workers will usually resent working without pay and utility companies make a habit of disconnecting clients who don't pay their bills. Penalties If your working capital is less than your running expenses, you will fall behind in your mortgage payments, telephone bills, line of credit costs and other basic expenses. Lenders and service providers will start charging penalties and interest on the money you owe, which won't help your working capital situation. If you fail to fix your working capital issues and continue to miss payments, service providers may cancel their services altogether. Bankruptcy The final outcome for an organization that does not manage its working capital and cannot pay for its debts and other running expenses is bankruptcy. Even if the company has enough assets to pay its creditors, if the money is not at hand, the organization might have to sell its assets or even declare bankruptcy to cover its debts. ]
Expert answered|sipichapie|Points 4779|
Question
Asked 2/26/2013 6:10:46 PM
0 Answers/Comments
Get an answer
New answers
Rating

There are no new answers.

Comments

There are no comments.

Add an answer or comment
Log in or sign up first.
Questions asked by the same visitor
what traits should you have working in the human service field?
Weegy: Pursuing a career in human services requires that you possess certain characteristics and traits. If you have specific qualities you can enter a specialized career in developmental services and social services. [ Each career will require that you obtain certain skills in order for you to be successful. Careers in human services consist of case management, mental healthcare, social work, community support, and counseling. In addition to the traits you possess, you will need to obtain skills that are necessary for your required job tasks. This can be done through a higher education program that offers human services training programs. Developmental services professionals are trained to provide support and services to adults and children with developmental disabilities. You can work with individuals who suffer from autism, epilepsy, down syndrome, and cognitive disabilities in order to help them function and live healthy lifestyles. You will need to possess characteristics that are beneficial to your career. These traits can include: Compassion Patience The desire to help others Consistency Organization ] (More)
Question
Expert Answered
Asked 2/19/2013 1:52:39 PM
0 Answers/Comments
Why is the Levinson's theory important?
Weegy: Daniel Levinson graduated from Yale as a psychologist. He later developed a comprehensive theory of adult development. [ This theory is important because it is one of the only ones which suggests that development and growth happens well into the adult years. ] (More)
Question
Expert Answered
Asked 2/19/2013 7:39:26 PM
0 Answers/Comments
What information is needed to prepare a cash budget?
Weegy: In general an operating budget is based on accrual accounting and, therefore, doesn't necessarily coincide with a cash budget. In general, the cash budget uses the operating budget for operating expenses. [ However, the cash collected differs from the revenue stream in timing only (assuming the company sells on credit). The payment stream also differs from the operating expense budget in timing for those vendors that get paid on credit terms, and also based on the payroll timing. ] User: What is the relationship between an operating and a cash budget? (More)
Question
Expert Answered
Asked 2/19/2013 9:25:03 PM
0 Answers/Comments
What is the relationship between an operating and a cash budget?
Weegy: Your cash budget should be based strictly on the money you expect to have on hand, not payments or bills that are due but haven't been paid. [ By focusing on cash on hand, the cash budget can tell you whether you'll have enough money in the bank to pay all the expenses in the operating budget. If not, you know you need to look for outside sources of funding, defer payment until later or reduce some of your expenses. Read more: What Is the Relationship Between an Operating & a Cash Budget? | eHow.com ] (More)
Question
Expert Answered
Asked 2/19/2013 9:39:07 PM
0 Answers/Comments
What is the break-even point?
Weegy: Break-even (or break even) is a point where any difference between plus or minus or equivalent changes side.. break-even point (BEP) is the point at which cost or expenses and revenue are equal: User: What decisions does the break-even point help an organization make? (More)
Question
Expert Answered
Asked 2/20/2013 7:38:20 AM
0 Answers/Comments
21,994,941 questions answered
Popular Conversations
Locate the verbal in the following sentence and identify its ...
Weegy: Check the turkey to see if it is done. Infinitive: To see; Use: Adverb. User: Locate the infinitive and ...
9/3/2015 4:37:24 PM| 4 Answers
Quantitative variables use which two levels of measurement? A. ...
Weegy: C. Nominal and ordinal. User: Internet surveys posted on popular websites have no bias since anyone can ...
9/2/2015 9:08:48 PM| 2 Answers
Fishing is the leading industry in ...
9/3/2015 9:21:23 AM| 2 Answers
4x3 – 3x2 + x + 3x3
Weegy: x=4
9/3/2015 12:54:05 PM| 2 Answers
Locate the complete adjective phrase and the noun modified. I heard ...
Weegy: Please indicate the sentence so I can give you the answer. Thanks! User: Locate the complete adjective phrase ...
9/3/2015 4:46:53 PM| 2 Answers
Weegy Stuff
S
L
L
P
1
Points 102 [Total 9412]| Ratings 1| Comments 92| Invitations 0|Offline
S
1
L
L
P
R
Points 93 [Total 9416]| Ratings 0| Comments 93| Invitations 0|Offline
S
Points 69 [Total 374]| Ratings 0| Comments 69| Invitations 0|Offline
S
Points 49 [Total 833]| Ratings 0| Comments 49| Invitations 0|Offline
S
Points 15 [Total 203]| Ratings 0| Comments 15| Invitations 0|Offline
S
Points 11 [Total 16]| Ratings 1| Comments 1| Invitations 0|Offline
S
Points 9 [Total 233]| Ratings 0| Comments 9| Invitations 0|Offline
S
Points 6 [Total 289]| Ratings 0| Comments 6| Invitations 0|Offline
S
Points 4 [Total 60]| Ratings 0| Comments 4| Invitations 0|Offline
S
Points 2 [Total 12]| Ratings 0| Comments 2| Invitations 0|Offline
Home | Contact | Blog | About | Terms | Privacy | Social | ©2015 Purple Inc.