Cash and Working Capital

HSm340: health services finANCE| Cash and Working cracking| | | Working Capital Cycle The working majuscule cycle consists of 4 activities that an organization encompasses. These activities, or phases, of the working capital cycle complicate: (1) obtaining interchange; (2) turning cash into resources, such as inventories and labor, and salaried bills; (3) using the resources to provide services; and (4) billing patients for the services, and collecting revenues so that the cycle can be continued (Cleverley, Song, & Cleverley, 2011). short-run Funds Three primary sources of short-run funds include art credence between companies, loans from commercial banks or finance companies, factor in of accounts receivable and there is also the option of business credit cards. First is trade credit, which is a spontaneous source of funding in that it arises from ordinary business transactions. In a prearranged agreement, suppliers charge goods or provide services to their customers, who in turn, pay their suppliers at a later date (Hill, n.d.). Next, is obtaining loans from commercial banks or finance companies. This would be wise ratement because in the event that angiotensin-converting enzyme would need to borrow cash, the funds would already be available.

By arranging a line of credit prior to the capital (cash) need, your company will not experience sales or production interruptions due to cash shortages. Thirdly, comes factoring of accounts receivable. Factoring is short-run financing that is obtained by selling or transferring your Accounts Receivable to a third party - at a discount - in exchange for immediate cash (Hill, n.d.). Short-term Investment An organizations short-term investment options for idle cash include four areas. If cash comes in faster than it is needed to pay bills, businesses can invest the cash surplus for periods as short as atomic number 53 day or for as long as unitary year, until it is needed. Such temporary investments of cash are known as marketable securities. Many... If you want to get a full essay, influence it on our website: Orderessay

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