Financial Analysis for Managers DQ4 Essay Example | Topics and Well Written Essays - 500 words

Financial Analysis for Managers DQ4 - Essay ExampleIn organizations, for the investors interest, teemingness in the companys working capital depicts a positive sign in making financial amendments and integrations internally and also in the market to compete other companies.After globalization, a number of companies be canvas their positions in the market by considering their past and current records and predicting their futures associated with liquidity and solvency of firms assets (Bernstein et al, 1997).Today the policy makers, especially the governments, deep observe the trends in variations of the working capital of organizations to impose rules and regulations on them. Even the investment decisions from giant companies are also based on the extent of working capital that a company possesses.Inventories act as the important assets for various businesses and they also influence the revenue generation of different companies. Inventory costs are essential to determine because it affects the income and asset levels.The net income of an organization is dependent on the inventory costs, except for the assistant organizations, as the net income is directly linked with the costs of goods sold. Inventory costs can be categorise in two ways.