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