1. Inventory funds:
Refers to the funds of raw materials, semi-finished products, finished products and other items that enterprises need to store and manage in the production and sales process. This part of the funds usually exists in the form of commodity inventory or material inventory.
2. Accounts receivable:
Refers to the money that has not been recovered after the enterprise provides goods or services to customers, usually the money collected by stages according to the agreed conditions and time after signing a contract with customers.
3. Accounts payable:
Refers to the unpaid amount after the enterprise purchases raw materials, equipment, labor services and other commodities or services from suppliers, which usually needs to be paid within a certain period of time.
4. Advance payment:
Refers to the expenses paid to suppliers in advance by enterprises to obtain price discounts or ensure timely delivery, such as payment for goods or procurement service fees.
5. Current assets:
Refers to the assets held by enterprises that can be quickly realized, including cash, bank deposits, short-term financial management, securities, etc.
6. Current liabilities:
Refers to the debts that enterprises need to repay in the short term, including short-term loans, notes payable, wages payable, etc.
To sum up, working capital includes all kinds of funds that need to be paid and collected in the daily business activities of enterprises, which is necessary for the normal operation of enterprises. Mastering working capital is of great guiding significance to the business decision-making and financial management of enterprises.
The characteristics of working capital are as follows:
1, diverse sources-various financing methods.
2. Quantity fluctuates-the quantity of current assets changes with the internal and external conditions of the enterprise, sometimes high and sometimes low.
3. Turnover is short-term-the funds occupied in current assets will usually be recovered within one year or a business cycle, which can be solved by short-term financing.
4. The physical form is changeable and easy to realize-the physical form is constantly changing and has strong liquidity.
Working capital is the general name of current assets and current liabilities of enterprises. The balance of current assets minus current liabilities is called net working capital. Working capital management includes current assets management and current liabilities management.