Attachments for Assignments

Module Five Activity

Ayanna Knight

Southern New Hampshire University

FIN-320-X2129 Principles of Finance 21EW2

November 28,2021

Financial statements

Operating capital is equal is equal to $168,000

Net gains from the operations are equal to $200,000

Revenue generated out of the operations is equal to $500,000

Net profit is $132,000

As for the involved company, numerous financial statements are needed for calculating the working capital of the business and this is also associated to the manner that every financial statement might be used. As an example, within the financial role of the involved company, the working capital is one that is required to finance all the activities that are required for ensuring that the business keeps on progressing. Therefore, as based on the mathematical concept, the overall costs of the operations are those that are required to be less than the overall revenue generated and this is a situation that would enable the realization of a revenue out of the transactions that are being carried out, (Ohrn, 2018). The utilization of the financial statement is by trying to reveal to the people all that is required for making sure that they continue receiving the services they require and one that would allow the business to continue receiving the profits they deserve.

The role of the working capital

The working capital is one that plays a significant role when it comes to the effectiveness of the business and also in relation to the management concepts that are required in ensuring that the working capital highly corresponds to the overall success of the business. The working capital is also that is made to make sure that the gains are those that exceeds the expenditure so that a profit might be realized. As an example, from the incorporated organization, the working capital is one that has been associated with trying to bring about the success of the involved firm and one that would be used in providing pieces of evidence and information to the other firms so that they may become profitable.

The interpretation of the working capital

The working capital is one that would be interpreted from the various perspectives and one of them is that of the generation of a profit or a revenue. As developed above, the working capital of the business may be highly interpreted.

The calculation may be made as follows and also as described above:

Operating capital is equal is equal to $168,000

Net gains from the operations are equal to $200,000

Revenue generated out of the operations is equal to $500,000

Net profit is $132,000

Therefore, from the above definition and description, the working capital may be described as one that is highly important in ensuring that the involved business realizes some profits.

The direction of the working capital

As far as the working capital is concerned, it is important to claim that the working capital is one that has been measured and one that has been proven to be offering the essential capital that would aid the involved firm in realizing some profits since the overall business of an investment firm is one that is aimed at making sure that the business makes some.

Value of the business

The management and direction of the working capital management of the business is one that would be deemed as being reliable. As for the Mergent Online business, it is important to claim that the working capital and also the value of the business is one that is growing from time to time and one that is facilitating the growth of the business.

Reference

Eric Ohrn. (May 2018). The effect of corporate taxation on investment and financial policy. American Economic Journal: Economic Policy, 10(2). Pp. 272-301.