Everything you need to know about capital budgeting methods. Some of the capital budgeting methods are:- 1.Traditional Methods 2.Modern Methods 1. Traditional methods includes: a.Payback Period Method (PBP) and Its Variants - Post back period, Post payback profitability method, Discounted payback period b.Accounting Rate of Return Method (ARR) 2. Modern methods includes: a.Net Present Value (NPV) b.Profitability Index (PI) or [...]
Working capital refers to short-term funds that are needed to meet operating expenses. To quote Ramamoorthy, "It refers to the funds, which a company must possess to finance its day-to-day operations". It is concerned with the management of the firm's current assets and current liabilities. It relates to the problems that arise in attempting to manage the current assets, current [...]
Working capital in a business is needed because of the operating cycle. But the need for working capital does not come to an end after the cycle is completed. Since the operating cycle is a continuous process, there remains a need for continuous supply of working capital. However, the amount of working capital required is not constant throughout the year, [...]