Liquidity management – NBC Institute

FM – Nov 2017 – L2 – Q4a – Working Capital Management

Explain the concept of overtrading, its symptoms, and how firms can overcome this situation.

Question

Before the credit crunch, tenanted-pub firms borrowed cheaply in order to buy up back street boozers. But the debt crisis and the resulting slowdown have left the tenanted-pub industry nursing the hangover from hell.” – Financial Times, November 27/28, 2010.

Required:
Explain the term “overtrading” and in your answer show how the financial backers could diagnose (or misdiagnose) the main symptoms of this condition, the various possible causes of such symptoms, and how firms could overcome this situation. (8 marks)

Answer

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Tags: Financial Distress, Liquidity management, Overtrading
Level: Level 2

Topic: Working Capital Management
Series: NOV 2017

FM – MAY 2019 – L2 – Q4b – Working Capital Management

Explain the advantages a company may derive from proper working capital management.

Question

The need for working capital management varies from industry to industry, and they can even vary among similar companies. This is due to several factors, including differences in collection and payment policies, the timing of asset purchases, the likelihood of a company writing off some of its past-due accounts receivable, and in some instances, capital-raising efforts a company is undertaking. Proper management of working capital is essential to a company’s fundamental financial health and operational success as a business.

Required:
Explain FOUR (4) advantages a company may derive from proper working capital management. (6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Financial health, Liquidity management, Operational success, Working Capital
Level: Level 2

Topic: Working Capital Management
Series: MAY 2019

FM – Nov 2017 – L2 – Q4a – Working Capital Management

Explain the concept of overtrading, its symptoms, and how firms can overcome this situation.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Financial Distress, Liquidity management, Overtrading
Level: Level 2

Topic: Working Capital Management
Series: NOV 2017

FM – MAY 2019 – L2 – Q4b – Working Capital Management

Explain the advantages a company may derive from proper working capital management.

Question

Required:
Explain FOUR (4) advantages a company may derive from proper working capital management. (6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Financial health, Liquidity management, Operational success, Working Capital
Level: Level 2

Topic: Working Capital Management
Series: MAY 2019

Question Tag: Liquidity management

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FM – Nov 2017 – L2 – Q4a – Working Capital Management

Explain the concept of overtrading, its symptoms, and how firms can overcome this situation.

FM – MAY 2019 – L2 – Q4b – Working Capital Management

Explain the advantages a company may derive from proper working capital management.

FM – Nov 2017 – L2 – Q4a – Working Capital Management

Explain the concept of overtrading, its symptoms, and how firms can overcome this situation.

FM – MAY 2019 – L2 – Q4b – Working Capital Management

Explain the advantages a company may derive from proper working capital management.

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Question Tag: Liquidity management

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FM – Nov 2017 – L2 – Q4a – Working Capital Management

Explain the concept of overtrading, its symptoms, and how firms can overcome this situation.

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FM – MAY 2019 – L2 – Q4b – Working Capital Management

Explain the advantages a company may derive from proper working capital management.

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FM – Nov 2017 – L2 – Q4a – Working Capital Management

Explain the concept of overtrading, its symptoms, and how firms can overcome this situation.

You're reporting an error for "FM – Nov 2017 – L2 – Q4a – Working Capital Management"

FM – MAY 2019 – L2 – Q4b – Working Capital Management

Explain the advantages a company may derive from proper working capital management.

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