Monday, May 2, 2011
How to Finance Assests
Working capital management involves decisions relating to current assets, including decisions about how to finance these assets. In deciding how to finance current assets, management needs to consider both the risk and return aspects of the alternatives. Online MBA needs needs to consider both the risk and return aspects of the alternatives. Online MBA course must also weigh up the benefits of having short- term finance against the risks that are associated with this type of finance.
Accruals are continually recurring short-term liabilities such as accrued wages, accrued taxes. As most firms generally pay their employees in arrears, accrued wages would be owed as we learn in correspondence MBA. Similarly, because the firm pays company tax and indirect taxes in arrears, a liability would exist for accrued. Accruals are expected to increase spontaneously with increased turnover. This type of finance is free in the sense that no interest need be paid on funds raised through accruals. However, it is unlikely that a firm is able to control its accrual as they are result of externals factors and depend upon the level of production and turnover , such time our correspondence MBA knowledge help us.
In recent years, many parts of world, have implemented the just-in-time philosophy of inventory management. It has been possible to implement this technique as a result of significant changes in manufacturing technology and factory automation. Just in Time (JIT) is referred as a method of management. According to distance learning MBA globalization has increased the distance between suppliers to take advantages of lower cost structure, yet transportation cost has risen. The solution may be to lessen the complexity and distance of the supply chain by having same as we discus in one year executive MBA. While accounts receivable often comprise a major part of the working capital structure of the firm. Unfortunately accounts receivable settlement terms frequently strain the liquidity requirements of the firm.