Conducting activity with
banks and other activities related to maintaining the current balance sheet of
the business is critical to a properly conducted ongoing of any organization.
credit is the total credit available to a business or an individual provided by
a banker. The credit depends on the loaner’s ability to obligate to repay the
loan, and the total credit available at the banking institution.
Circulating Capital Management
Capital Management refers to the organization’s management accounting strategy;
its role is to monitor and use the two components of circulating capital:
current assets and joint liabilities; to ensure the most efficient economic
activity of the organization. The primary purpose of circulating capital
management is to ensure that the organization always maintains sufficient cash
flow to meet the short-term operating costs.
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