TJK manufactures candles．Contributing to sustainable development is important to TJK．The business uses batch production in its factory in country X ．The target market for TJK＇s products is females between 20 and 50 years of age．The Managing Director is reviewing TJK＇s financial data． An extract is shown in Table 3．1．He is also considering the benefits to a business of becoming a multinational company． （a）Define＇working capital＇． .......................................................................................................................................
Exam No：0450_m25_qp_12 Year：2025 Question No：3(a)
Answer:
Award 2 marks for a full definition. Award 1 mark for a partial definition
- The money available for a business to pay its day-to-day expenses/short-term debts. [2]
- Current assets - current liabilities. [2]
Partial definition, e.g.
- Funds used to pay inventory/wages/electricity [1]
- The money available for a business to pay its day-to-day expenses/short-term debts. [2]
- Current assets - current liabilities. [2]
Partial definition, e.g.
- Funds used to pay inventory/wages/electricity [1]
Knowledge points:
5.2.1.1. Why cash is important to a business
5.2.1.2. What a cash-flow forecast is, how a simple one is constructed and the importance of it
5.2.1.3. Amend or complete a simple cash-flow forecast
5.2.1.4. How to interpret a simple cash-flow forecast
5.2.1.5. How a short-term cash-flow problem might be overcome, e.g. overdraft, delaying supplier payments, asking debtors to pay more quickly
5.2.2.1. The concept and importance of working capital
Solution:
Download APP for more features
1. Tons of answers.
2. Smarter Al tools enhance your learning journey.
IOS
Download
Download
Android
Download
Download
Google Play
Download
Download