1. Working Capital The sum of the organization's invest-
ment in current assets, or more sim-
ply, total current assets
2. Current Assets Cash, and other short-term assets
that the organization expects to con-
vert to cash w/in one year.
3. How to measure current assets Terms of liquidity or ability to be con-
verted to cash
4. Current assets include Cash, Short-term securities, Ac-
counts receivable, Inventories, Pre-
paid expenses
5. Cash Money on hand, cash equivalents in-
cluding investments with maturity of 3
months or less
6. Short-term securities Investments with a maturity of less
than one year
7. Accounts receivable Money due from patients/insurers that
have already received services
8. Inventories The value of supplies on hand (current
assets on balance sheet)
9. Prepaid expenses Money paid in one accounting period
for value consumed in a later period.
10. Net Working Capital The difference between current as-
sets and current liabilities; indicates
an organization's debt-paying capac-
ity.
11. Current Liabilities Include accrued wages payable and
accounts payable.
12. assets productive
, C428 WGU
Working Capital is the catalyst
makes
13. Sufficient amounts of Working Capital
___________________enable orga-
nizations to pay the employees and
vendors on time.
14. Working Capital demonstrates? Demonstrates to lenders that organi-
zations are creditworthy.
15. Sources of Working Capital Equity, Net income, Borrowed mon-
ey (increase in noncurrent liabilities)
Sale of noncurrent assets.
16. Sources of Working Capital: Gov- Initial working capital comes from tax-
ernmental Organization es and bonds.
17. Sources of Working Capital: Initial working capital comes from
Not-For-Profit Organizations community/religious order through
tax-exempt bonds philanthropy.
18. Sources of Working Capital: Initial working capital comes from sale
For-Profit-Organization of stock.
19. When healthcare organizations Equity, Debt, Trade Credit
have an unexpected increase in
business that depletes their work-
ing capital reserves, they need
temporary working capital, which
comes from?
20. Permanent Working Capital Needs Equity
21. Temporary working Capital Needs Equity, Debt, Trade Credit.
22. Interest on Short-Term Loans Interest = Amount borrowed X Annual
interest rate X Percentage of the year
23. Cash Flow
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