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Post by account_disabled on Dec 28, 2023 3:25:28 GMT
Shows a Value of Over 100 Percent , Your Company Has Good Liquidity . Otherwise, Your Liabilities Will Exceed Your Current Negative (“ Negative Working Capital ”). Working Capital Ratio 2 With Wcr 2 You Put the Working Capital in Relation to the Short-term Current Assets. In This Way, You Can See How Much of Your Current Assets You Can Finance in the Long Term. Use the Following Formula for the Calculation : Formula for Calculating the Working Capital Ratio 2 in the Example Above , the Working Capital is 125,000 Euros (400,000 - 275,000), While the Current Assets Are 400,000 Euros. This Leads to the Following Calculation With Regard to Wcr 2 : Working Capital Ratio 2 = (125,000 Euros / 400,000 Euros) X 100 = 31.25% a Value Above 30 Percent is Considered Optimal , Although C Level Contact List Anything Above This Also Indicates Good Liquidity . You Should Then Have No Difficulty Financing Your Business in the Short and Long Term. Is There an Optimal Value for Working Capital? There is No General Value for Working Capital That is Always Optimal in Every Industry. What is Crucial is That the Working Capital is Positive. Only if You Do Not Have Negative Working Capital Will There Be Enough Capital Available to Pay Your Short-term Liabilities. However, the Value Should Not Be Too High , Otherwise Valuable Financial Resources Will Be Tied Up Unnecessarily. When Budgeting , Many Companies Plan to Have 2.5 Times the Current Liabilities in Their Last Balance Sheet Available as Working Capital. This Means You Can Safely Pay Ongoing Costs, but Still Have Enough Capital Available for Unexpected Expenses.
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