[amp_mcq option1=”Block of cash” option2=”Loosing interests” option3=”Lack of production” option4=”Lack of smooth flow of production” correct=”option1″]<\/p>\n
The correct answer is: A. Block of cash.<\/p>\n
Excess working capital is the amount of money that a company has on hand that is not being used to generate revenue. This can happen for a number of reasons, such as when a company has a large amount of inventory or receivables. Excess working capital can be a problem because it ties up money that could be used to invest in new projects or pay down debt. It can also lead to higher interest costs, as the company will have to pay interest on the money that it is not using.<\/p>\n
There are a number of ways to reduce excess working capital. One way is to reduce inventory levels. This can be done by improving the company’s inventory management system or by negotiating better terms with suppliers. Another way to reduce excess working capital is to collect receivables more quickly. This can be done by implementing a more aggressive collections policy or by offering discounts for early payment.<\/p>\n
Reducing excess working capital can improve a company’s financial performance. It can free up money that can be used to invest in new projects or pay down debt. It can also lead to lower interest costs.<\/p>\n
Here is a brief explanation of each option:<\/p>\n
[amp_mcq option1=”Block of cash” option2=”Loosing interests” option3=”Lack of production” option4=”Lack of smooth flow of production” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-51730","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n