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TILLINTON CO (SEP 18)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › TILLINTON CO (SEP 18)

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
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  • February 27, 2021 at 10:27 am #611953
    Noah098
    Member
    • Topics: 935
    • Replies: 352
    • ☆☆☆☆☆

    “The figures for other current assets seem to support the chief executive’s contention that working capital is being managed better, as other current assets are falling as revenue and gross profits are rising.”

    sir how does a fall in current assets suggest that working capital is being managed better?

    February 27, 2021 at 2:51 pm #611993
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54738
    • ☆☆☆☆☆

    Because current assets should be kept as low as reasonably possible – by collecting receivables in sooner, operating a just-in-time inventory policy, not holding more cash then needed.

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