Definition of "working capital" involves a lot of financial resources of the organization, ensuring the formation and circulation of fixed assets.In other words, the concept is characterized by continuous moving of total assets.Thus, all current assets can be divided into two categories:
1. Production assets.
2. Funds treatment.
Each of these elements is responsible for certain areas.For example, the first group may be regarded as objects of labor used during the turnover of the production cycle.It may also include unfinished products, feedstock supplies and accessories, and more.The cost of used tools and implements in full the cost of carry over of output.Of course, the formation of working capital comes at the expense of the second group.It includes all the tools that are interlinked with the auxiliary and service processes of the circulation of goods.To this category can be fairly attributed to be released, but not yet paid by customers, products, and financial funds credited to the accounts in various banks.The most striking example of this kind can be finished goods, issued by the entity or the same range of services rendered to the organization.
Thus, the working capital of the enterprise - is monetary assets, which advanced by one of the above two categories.It should also be noted that the Fund is an important feature: as mentioned earlier, they will certainly participate in the production process, and the cost is fully offset by the outstanding products and services.
working capital - is a group of assets, which traditionally can be divided into three main parts:
1. Semi-finished.
2. Inventories.
3. Prepaid expenses.
In addition, the working capital of the enterprise - the two categories, depending on the selected source of formation.Due to this classification allocate loan assets and property stocks.At the same time it must be remembered that if the second group is a fairly clear structure, the first characteristic may cause some difficulties.Thus, the working capital of the enterprise - are loans issued by the bank, as well as accounts payable.
It should be noted that some of the categories of current assets subject to valuation.In such a group are: stocks of finished goods, work in progress and the remnants of the previous periods are also stored in the warehouse of the enterprise.All other elements of working capital related to normalization is not needed.This traditionally carry unloaded but not yet paid by the buyers of the products, as well as funds for a day on hand, and others.
Allocate the concept of current assets.This term represents funds that are used during the course of the normal operating cycle or are repaid within a year.
