A tenant went to stay in a hotel and gave the owner a hundred yuan for the room. The owner used the one hundred yuan for the room and gave it back to the pork seller, who in turn used the one hundred yuan. The pig farmer gave 100 yuan back to the feed seller, the feed seller gave it back to the prostitute, the prostitute stayed in the hotel and gave the 100 yuan to the shopkeeper, and the tenant was not satisfied with the house. After checking out, the owner refunded the 100 yuan to the tenant.

Significance

① Strengthening the management of working capital can accelerate the turnover of working capital, reduce the occupation of working capital, and promote the development of enterprise production and operation.

② Strengthening the management of working capital will help promote enterprises to strengthen economic accounting and improve the level of production and operation management.

Extended information

Importance of working capital

The importance of working capital is that each turnover can generate operating income and create profits, so the turnover of working capital is Be the direct creator of corporate earnings. The following is an example analysis:

The enterprise invested $10 in costs and recovered $12 in cash through business activities. After deducting the cost of $10, there is still a surplus of $2. Therefore, every turnover of working capital can create a profit of $2. If there is turnover, there will be profit opportunities. Therefore, it can be said that every turnover of working capital directly creates a company's surplus.

Difference

Current assets refer to the physical part of circulating funds and are the main content of national property. They withdraw from the production process at a certain point in time but do not enter the field of consumption and temporarily withdraw from production. process as a final product that will continue to play a role in future production. The main difference between it and working capital is the different scope included.

Liquidity covers a wide range. It is the monetary expression of current assets plus financial assets. Current assets include material current assets and do not include financial assets, such as cash on hand, bank deposits, etc.

Baidu Encyclopedia - Liquidity