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Working capital: Difference between revisions
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Amwelladmin (talk | contribs) (Created page with "Generally your assets (cash on hand, accounts receivable and inventory) minus your liabilities, but in general terms your own funds available for use in the...") |
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Generally your [[asset]]s (cash on hand, accounts receivable and inventory) minus your [[Liability|liabilities]], but in general terms your own funds available for use in the daily operation of your business. The contents of your [[bank]] accounts and so on. | Generally your [[asset]]s ([[cash]] on hand, accounts receivable and inventory) minus your [[Liability|liabilities]], but in general terms your own funds available for use in the daily operation of your business. The contents of your [[bank]] accounts and so on. | ||
If you are a bank, money you receive in deposits contributes to your working capital. You can’t use ''all'' of it (some you have to set aside as {{tag|regulatory capital}}), but nor do you have to put the rest of it in little box on your safe with the depositor’s name on it. | If you are a {{tag|bank}}, money you receive in deposits contributes to your working capital. You can’t use ''all'' of it (some you have to set aside as {{tag|regulatory capital}}), but nor do you have to put the rest of it in little box on your safe with the depositor’s name on it. | ||
You would be surprised how many people who should know this, don’t. | You would be surprised how many well-paid people who ''should'' know this, ''don’t''. | ||
==={{t|Client money}} is working capital too=== | |||
[[Client money]], from the bank’s perspective, is a regular deposit and contributes to working capital. {{tag|Client money}} defines the depositor’s claim on the [[cash]], not the [[bank]]’s. | |||