Q: What are four general phases of the working capital cycle?
Stages of the Movement of Working Capital
There are four phases/stages of the working capital cycle:
In the first stage the funds (including their substitutes in the form of short-term investments) are used for the acquisition of goods, i.e. included in inventories.
In the second stage included inventories resulting from direct production activities are transformed into finished goods inventory.
In the third stage of stocks of finished products and sold to consumers before they are converted to payment receivables.
In the fourth stage of the collected, i.e. paid, accounts ...