Proposal for a working capital analysis procedure (Original)

Abstract

The evaluation of the management of financial administration is a valuable instrument available to financial managers and management boards of each company, which allows them to visualize the behavior of the necessary economic elements in business management; that guarantees an accurate decision making. Sustained in the previous reflection, this work is carried out, which is very beneficial for the company; when being involved in the process of implementing the Economic Guidelines that are taxed to update the Economic Management Model; which requires that the country's business system be constituted by efficient and effective companies. Undoubtedly for the purpose of this purpose an efficient financial administration is fundamental; hence the objective of this work is: to design a procedure for the analysis of working capital by applying the methods and techniques for making timely decisions in any company. The Financial Statements of different periods of time are proposed as a basis for the study, starting from the application of surveys and interviews to the staff of the entity and suppliers. The application of the procedent will allow knowing that the company operates with positive Working Capital with a tendency to decrease and detect financial weaknesses in the administration of cash, Accounts Receivable and Payments and Inventories, as well as encouraging the cash budget to be used as tool in the administration of the same, to plan opportunely the sources of financing or to invest in a profitable way the excess.