This week’s topics
Nature and Elements of Working Capital
- Operating cash cycle
- Current assets and current liabilities
- Liquidity versus profitability trade-off
- Overtrading risks and solvency
- Management of Working Capital - Introduction - ACCA Financial Management (FM)
- Overcapitalisation and Overtrading - ACCA Financial Management (FM)
- Nature of the Working Capital Management
What you will be able to do
- 2.1 Explain the nature, elements and importance of working capital in a business.
Activity
Start with this week’s 3 videos, then: Seminar, guided reading and a short written task: explain the nature, elements and importance of working capital in a business.
Study materials
Videos
- Management of Working Capital - Introduction - ACCA Financial Management (FM) · YouTube · OpenTuition · 30 min · for registered students
- Overcapitalisation and Overtrading - ACCA Financial Management (FM) · YouTube · OpenTuition · 12 min · for registered students
- Short-term Liquidity Ratios | Financial Statement Analysis · YouTube · Edspira · 12 min · for registered students
- Overtrading | A-Level & IB Business · YouTube · tutor2u · 5 min · for registered students
Further resources
- Principles of Finance 2e, ch. 19: The Importance of Trade Credit and Working Capital in Planning · PDF · OpenStax, textbook chapter; pp. 567–598 · for registered students
- Principles of Accounting Vol. 1, ch. 5.3: Current ratio and working capital · PDF · OpenStax, textbook chapter; pp. 272–282 · for registered students
- Introduction to Financial Accounting, Lyryx 2023-A, ch. 4: The Classified Balance Sheet and Related Disclosures · PDF · Other, textbook chapter; pp. 155–184 · for registered students
Materials marked “for registered students” open in the student portal, which is set up as soon as you receive final acceptance.
