Define each of the following terms: a. Working capital; net working capital; net operating working capital b.

Question:

Define each of the following terms:
a. Working capital; net working capital; net operating working capital
b. Relaxed policy; restricted policy; moderate policy
c. Permanent current operating assets; temporary current operating assets
d. Moderate (maturity matching) financing policy; aggressive financing policy; conservative financing policy
e. Inventory conversion period; average collection period; payables deferral period;
f. Cash budget; target cash balance
g. Transactions balances; compensating balances; precautionary balances
h. Trade discounts
i. Credit policy; credit period; credit standards; collection policy; cash discounts
j. Account receivable; days sales outstanding; aging schedule
k. Accruals; trade credit
l. Stretching accounts payable; free trade credit; costly trade credit
m. Promissory note; line of credit; revolving credit agreement
n. Commercial paper; secured loan

Cash Conversion Cycle
Cash conversion cycle measures the total time a business takes to convert its cash on hand to produce, pay its suppliers, sell to its customers and collect cash from its customers. The process starts with purchasing of raw materials from suppliers,...