Scribd Logo
Upload

Welcome to Scribd!

  • 6 views

    Busness English

    Uploaded by

    Isabel Hernandez
    The document discusses the concepts of working capital and break-even point. Working capital is the money available for daily operations and is calculated using current assets minus current liabilities. The break-even point is where total costs equal total revenue, resulting in no net profit or loss.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Busness English

    Uploaded by

    Isabel Hernandez
    6 views2 pages
    The document discusses the concepts of working capital and break-even point. Working capital is the money available for daily operations and is calculated using current assets minus current liabilities. The break-even point is where total costs equal total revenue, resulting in no net profit or loss.

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document discusses the concepts of working capital and break-even point. Working capital is the money available for daily operations and is calculated using current assets minus current liabilities. The break-even point is where total costs equal total revenue, resulting in no net profit or loss.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    6 views2 pages

    Busness English

    Uploaded by

    Isabel Hernandez
    The document discusses the concepts of working capital and break-even point. Working capital is the money available for daily operations and is calculated using current assets minus current liabilities. The break-even point is where total costs equal total revenue, resulting in no net profit or loss.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Today's term is working capital working capital is the money available to the

    company for the day-to-day activities very important because it is the lifeblood of
    any business here's the formula for working capital we have series of carrying
    assets and that represents a certain amount of money.

    Current liabilities and that equals working capital but what is a current asset a
    current asset is any asset that can be converted into cash in a reasonably short
    period of time good example of current assets could be accounts receivables or
    inventories marketable securities are prepaid expenses so all the money that is
    other assets that we will become liquid cash in less than a year period now the
    next term is liabilities and what is a current liability the same thing a liability it's a
    commitment but an application that a company has that needs to be fulfilled in a
    reasonably short time less than a year so working capital is so important because it
    represents or it's an indicator of the overall health financial health of the company
    and you need to understand this concept very well so that you can participate in
    meetings or you can talk about different aspects of the business but always using
    numbers and because if you don't have numbers you just another person with an
    opinion so practice this term working capital the money available to the company
    for today operations.

    Today we are going to introduce a new concept which is very common in to the
    economists theory which is called the break-even point to put it simply the break-
    even point is the point where the total costs and the total sales are equal which
    means that the company has no net profit or losses graphically you can see that
    the break-even point is the point where the total cost and the total revenue curves
    meet the break-even point analysis is important because it provides helpful
    information to managers and businessmen about company which pretty much uh
    demonstrate whether the company is being profitable or is how team allows us to
    calculate the break-even point to have a special formula fixed cost divided between
    told sales Germany minus the cost to make the product which is called also the
    contribution margin as an example we have this $500,000 which is the fixed cost
    divided in between five hundred dollars which represents the total sales revenue
    minus three hundred dollars which is the cost to make the product all of that equals
    two hundred two thousand and five hundred units which is the break-even point
    that means that a two thousand and five hundred units the company will have no
    losses nor profit we hope you found this video useful and let you enjoy it thank you
    so much for watching

    CASE PROBLEM
    Given the following, calculate working capital for ABC, Inc.
    1. Accounts receivables: 13,238$
    2. Accounts Payables: 1,485$
    3. Inventory: 500$
    4. Payroll: 3,500$
    5. Taxes: 898$

    You might also like