This year was better than the past, but I have less money than before ... What happened to my money? Who took her? Why do not I have? This seems the work of Black magician or a disciple of himself Harry Potter, is neither more nor less than what usually happens in micro and SMEs, when all the numbers but say they won silver, silver is not. A track, which has the silver, known as Working Capital or Working Capital, for lovers of international standards.
The problem is not necessarily to win, it just won silver in the format "effective." This gain may be involved in more merchandise to sell or manufacture, or may be owing me my clients. Put aside the goods or machines that could have bought with that gain, as it is very rare not to see that the money was spent on things of this magnitude. Debtors and goods, not are so visible as a car, machine or new deposit.
The Working Capital changes almost daily, purchasing sales, collections and payments we make, and just the name indicates that it is the capital that our company or enterprise needs to work. About
already know that this is the Working Capital, this explanation may seem very vague technique, but in pursuit of achieving understanding that it is for those who see it for the first time, I think it is easier to understand without delving into highly technical issues.
In a simple example that lets us see better what is this "thief of my money," we can say that
"At the beginning of the year had $ 10 cash, debts $ 10; merchandise to be sold for 40 and due to my suppliers of goods other $ 10.
The problem is not necessarily to win, it just won silver in the format "effective." This gain may be involved in more merchandise to sell or manufacture, or may be owing me my clients. Put aside the goods or machines that could have bought with that gain, as it is very rare not to see that the money was spent on things of this magnitude. Debtors and goods, not are so visible as a car, machine or new deposit.
The Working Capital changes almost daily, purchasing sales, collections and payments we make, and just the name indicates that it is the capital that our company or enterprise needs to work. About
already know that this is the Working Capital, this explanation may seem very vague technique, but in pursuit of achieving understanding that it is for those who see it for the first time, I think it is easier to understand without delving into highly technical issues.
In a simple example that lets us see better what is this "thief of my money," we can say that
"At the beginning of the year had $ 10 cash, debts $ 10; merchandise to be sold for 40 and due to my suppliers of goods other $ 10.
-During the year I sold x $ 100, buy for 50 $ (I sold) and had other business expenses of $ 10, pay what you buy this year, and copper only half of sales .
-At year's end I was left with debts of $ 60, merchandise for $ 40 to be sold, I end up owing another $ 10 to see my suppliers, and how to pay for the merchandise 50 and 10 of the costs and copper only 50, I had no effect. If you win 40 and 10 would have had $ 50 but I have no cash.
WHERE ARE THE $ 40 to win and I have him!! In this example, we are getting into what I need (Debts). While we have won silver in the form of CASH, we will find in our higher working capital. In the reality of each company, may be a little on each side, making it often too complex to find.
.
This seems simple in this example, it complicates the finance to more than one company, because if I pay tax on that gain, or give his share to each member of your profit, the money is not literally ! The classic example is having to pay VAT on invoices that have not copper.
A secret, and this black box can eat my money, I also can invent money if necessary. Let's say if instead of increasing my debtors and stock merchandise, increase what I owe my suppliers for purchases made, and obviously won silver this year, will more cash than it did at first. Some businesses finance their working capital with short-term bank loans or use the payments to providers to improve their position. Maybe with this explanation, we can understand why when we demand a payment to a company that we know who wins a lot, we always make the famous bicycle. Or your gain is in the black box and has no cash, or we are using just to finance more cheaply than with a bank ... with the financial crisis and as a reality, pay attention to working capital financing becomes a necessity not suffer unexpected financial shocks.
invite everyone to comment, query or tell about their experiences with the Working Capital, to leave a comment.
-At year's end I was left with debts of $ 60, merchandise for $ 40 to be sold, I end up owing another $ 10 to see my suppliers, and how to pay for the merchandise 50 and 10 of the costs and copper only 50, I had no effect. If you win 40 and 10 would have had $ 50 but I have no cash. WHERE ARE THE $ 40 to win and I have him!! In this example, we are getting into what I need (Debts). While we have won silver in the form of CASH, we will find in our higher working capital. In the reality of each company, may be a little on each side, making it often too complex to find.
.
This seems simple in this example, it complicates the finance to more than one company, because if I pay tax on that gain, or give his share to each member of your profit, the money is not literally ! The classic example is having to pay VAT on invoices that have not copper.
A secret, and this black box can eat my money, I also can invent money if necessary. Let's say if instead of increasing my debtors and stock merchandise, increase what I owe my suppliers for purchases made, and obviously won silver this year, will more cash than it did at first. Some businesses finance their working capital with short-term bank loans or use the payments to providers to improve their position. Maybe with this explanation, we can understand why when we demand a payment to a company that we know who wins a lot, we always make the famous bicycle. Or your gain is in the black box and has no cash, or we are using just to finance more cheaply than with a bank ... with the financial crisis and as a reality, pay attention to working capital financing becomes a necessity not suffer unexpected financial shocks.
invite everyone to comment, query or tell about their experiences with the Working Capital, to leave a comment.
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