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Excellent Mr. Vinod
Valuable information
Activity and peerless
The amount of time it takes to turn the net current assets and current liabilities into cash.
The working capital cycle (WCC) is the amount of time it takes to turn the net current assets and current liabilities into cash. The longer the cycle is, the longer a business is tying up capital in its working capital without earning a return on it. Therefore, companies strive to reduce its working capital cycle by collecting receivables quicker or sometimes stretching accounts payable.
Well explained by Mr. Vinod
Did you mean working capital turnover rate ??
Or working capital cycle ??
If the rate of capital factor is indicated by a kindly / Kamal Jawish
It is useful in the financial analysis of the company and useful on the performance evaluation of the company and its ability to achieve its goals with the knowledge that this rate may vary from one company to another depending on the nature of the activity, as well as elasticity of demand for goods and classification item that is if commodity consumer or an accessory, check the well-being of the consumer so increase mostly rates turnover factor in companies that provide consumer product increases the demand as well as based on the volume of investments in the company for example, is getting even double dozens of times turnover factor for a Fast Food Restaurants may reach36 times / year, unlike a company minerals industry Ocherkh transport dismiss manufacturing which may at least once a year and are judged at this rate based on the ideals of the rates for the same activity for the company in the same size and in the same conditions and the same external factors, in the same year.
If you are referring to the period of recovery of capital or the company's investment costs, which come through knowledge of the cam in the company can recover the entire investments which is useful especially for companies Alojneph which are based on assessment or study the feasibility of establishing projects in other foreign country for different political systems and economic conditions which may bear Accordingly risk from practicing the activity in a foreign company or a change in the laws and political systems, wars and an assets freeze on bank accounts of some countries and a ban on cash transfers, etc or prevent the import or export of some countries due to the emergence of some diseases and epidemics or cutting political relations
It can be quite straightforward to start a business, open premises and have staff. However, before you can start trading you require extra capital (cash and credit). You can do this by way of a business loan from a bank, from a venture capitalist or by mortgaging your home or business premises if they are yours. Having done so, you now possess working capital. It can be used to pay wages for the first couple of months until payments are received for services or goods. Because you now have a working capital, you are more likely to get sufficient credit from suppliers, probably thirty days to start with, later extended to two months. Provided everything went according to your business play, you are up and running and you will be soon able to repay your debts including the bank loan
I agree with the experts on WCC "the time frame of converting the current assets and the current liabilities into liquid cash".
I agree with all the answers on this one, this looks to be way behind my fickle knowledge on business or accounting. Thanks for the invitation though, I'm sure this is a great question that we can all learn from.
it starts from the procurement of raw materials to the realization stage of the sales proceeds of finished goods. the infused money in the business again recouped the realization proceeds by way of cash again undergoes different stages through different process knows as wcc.
