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Recent Working Capital questions

How do we classify loans in Quickbooks Online in the Chart

How do we classify loans in Quickbooks Online in the Chart of Accounts along with the repayment of them? We have a working capital loan in which the bank deposits the loan into our account and does a daily ACH withdrawal.

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Emilee Weaver

Controller

Masters of Professional Accounting

50 satisfied customers
Why does an increase in the ratio of current assets to total

Why does an increase in the ratio of current assets to total assets decrease both profits and risk as measured by net working capital? How do changes in the ratio of current liabilities to total assets affect profitability and risk?

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PDtax

Owner

Master's Degree

6,996 satisfied customers
Client had sold their business. It was an asset sale on

Client had sold their business. It was an asset sale on December 20th. Part of the sale included the working capital component. We determined the WC amount prior. On the date of the sale it was $60k less. We now have a 90 days, after that, WC will be actual. The client will most likely receive more money for the WC will be higher.Now since this client is a calendar client. I must wait the 90 days to determine the sale price so I can figure the gain, correct?The money they would get form the WC will be in 2016. That would still be part of the 2015 transaction correct?

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Rakhi Vasavada

Financial / Legal Advisor

Bachelor's Degree

3,986 satisfied customers
I'm writing a monthly cash flow statement and 't

I'm writing a monthly cash flow statement and don't fully understand 'working capital movement'. Also I pay for all my Cost Of Goods sold in advance, so that means I have zero creditors, is that right?

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Rakhi Vasavada

Financial / Legal Advisor

Bachelor's Degree

3,986 satisfied customers
I started a small business about 5 years ago, after an 18

I started a small business about 5 years ago, after an 18 year career with BofA was ended by being layed off. Needless to say corporate america is a much more predictable and stable place to work; and I never want to go back. However, I am having difficultyis taking the business to the next level because of gaps in my knowledge of running a business from a hollistic perspective - while I excel in process improvement and project management strategies, I am struggling in Sales and Marketing, and most specificallythe management of capital. I have invested over $40k cash and my around the clock management of the company, there is a 33% growth rate over the previous years gross sales, but I am completely strapped for cash. There is no working capital by which to growthe company, I am unable to create effective marketing strategies because the client base is not going to respond to internet marketing, and between payroll taking 60% of each dollar and then being double taxed on payroll there is nothing in my tool box withwhich to make an effective change. I am positive I am not the only business owner with this type of challenge. What type of legitimate company would I reach out to in order to raise working capital, and expand the business? If there even is one. Thank you.

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USTaxAdvising

Partner

Bachelor's Degree

1,668 satisfied customers
Is there any authority that one can complain to about

Is there any authority that one can complain to about performance related issues - if needed - of a CPA engaged in tax preparation ?

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

9,022 satisfied customers
Are ownership distributions in a closely held firm taken out

Are ownership distributions in a closely held firm taken out before or after amortization and depreciation and interest and taxes?

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

9,022 satisfied customers
You helped me with another financial question once before,

Hi Stephen. You helped me with another financial question once before, and I appreciated your answer, so I'm back again.......... I have recently been promoted General Manager of a small business (an LLC). As I reviewed the various assets of the business,I saw there was a line for "misc inventory." When I asked what that was, it is apparently some precious metals (silver) that is kept on site in the company safe. If needed, this silver can be liquidated for cash. I'm not sure why the previous manager listedthis as "misc inventory" instead of listing it as an investment. He told me his accountant told him to do it that way. In either case, however, if/when the time comes to liquidate it (or in this case "sell the inventory"), I would need to receive the cashas "misc income" and deplete "misc inventory" the amount of the "basis." Correct? (If I'm wrong thus far, please correct me). But, it doesn't stop there. I have no records about what the actual "basis" was. I asked the previous GM about this, and he said thathe bought precious metals at different times over the years-- some at lower than today's market value and some at higher-- but he has no records of sale; indeed, some of the transactions were cash purchases. He suggested that I just treat the 'basis' as thesame amount as the cash I would receive from the transaction. ." I.e., "cash" goes up; "misc inventory" goes down; the assets offset; there is no "misc income" to enter-- it's purely an exchange of assets. I'm asking for you comments about that advice. And,if that's not a viable way to go, do you have a counter-recommendation about how to deal with situation? I want to account for this correctly if/when the time comes. Thank you!

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

9,022 satisfied customers
Respond to the following scenario with your thoughts, ideas,

Respond to the following scenario with your thoughts, ideas, and comments. Be substantive and clear, and use research to reinforce your ideas. Apix is considering coffee packaging as an additional diversification to its product line. Here's informationregarding the coffee packaging project: Initial investment outlay of $40 million, consisting of $35 million for equipment and $5 million for net working capital (NWC) (plastic substrate and ink inventory); NWC recoverable in terminal year Project and equipmentlife: 5 years Sales: $27 million per year for five years Assume gross margin of 50% (exclusive of depreciation) Depreciation: Straight-line for tax purposes Selling, general, and administrative expenses: 10% of sales Tax rate: 35% Assume a WACC of 10%. Shouldthe coffee packaging project be accepted? Why or why not? Compute the project's IRR and NPV. In addition, answer the following questions: Do you believe that there was sufficient financial information to make a solid decision on what to do? Was there furtherfinancial information that you required that was not provided to you? What financial figure do you believe was the determinant to your decision and why? How would you be able to apply this particular financial information to other situations? Discuss riskmethodologies used in capital budgeting.

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PDtax

Owner

Master's Degree

6,996 satisfied customers
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