5-1 Activity- Working Capital Management FIN 320 PDF

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1 5-1 ACTIVITY: WORKING CAPITAL MANAGEMENT

5-1 Activity

Working Capital Management

FIN 320

SNHU

May 30, 2021

2 5-1 ACTIVITY: WORKING CAPITAL MANAGEMENT

I.

Financial Statement (s): Analyzing, company's financial statements can help supervisors

complete three significant assignments. Evaluate current execution screen and control activities and plan and conjecture future execution. The four different financial statements are the balance sheet, income statement, cash flow statement, and the statements of shareholders and equity. (Titman, S., Keown, A. J., & Martin, J. D. 2018., Pg. 41). To ascertain the working capital of an organization, the balance sheet should be used. Working capital management of day-to-day operations and decisions related to working capital and short-term financing is the fluctuation between current resources and current liabilities. An investor will be interested in this specific Statement because he/ she may want to know the company's status and if it will be s a good idea to invest in that company. He/she will need the balance sheet to get numbers as values like inventory value, revivable accounts, current assets, liabilities, payables, wage, debts, and payroll taxes, to name a few of the numbers that the investors may need to decide the next step. II.

Working Capital's Role: Working capital guarantees that an independent company can proceed with its exercises,

just as meet the momentary obligation and forthcoming operational costs. Effective working capital administration keeps up smooth tasks and can likewise assist with improving the organization's income and profitability. Management of working capital incorporates stock administration and the executives of records receivables and records payables. The principal goals of working capital administration incorporate keeping up the functioning capital working

3 5-1 ACTIVITY: WORKING CAPITAL MANAGEMENT

cycle and guaranteeing its arranged activity, limiting the expense of capital spent on the functioning capital, and amplifying the profit from current resource speculations.

III.

Working Capital Interpretation: It is calculated by taking current assets and deducting current liabilities. As of April 04,

2021 JNJ's Total assets are 172,557m, and total liabilities are 106,723m. The total of 65,834m. The working capital ratio is 1.62. JNJ is in a decent monetary position and will be able to take care of their bills on schedule. IV.

Working Capital Management Direction Comparing the company to previous years company is looking that it has a good

prosperity and a solid financial history. This American corporation is a multibillion company in sales. "Johnson & Johnson make Fortune's list of the World's Most Admired companies for 2021, placing in the top 20 this year. It's the 19th year in a row the company has been honored on the Top 50 All-Stars list, and it also placed #1 in the Pharmaceutical category worldwide for the eighth consecutive year." (Brody, 2021) This company was one of the companies that started to investigate potential vaccine candidates resulting in a single-dose COVID-19 vaccine. As of April 04, 2021, JNJ's Total assets are 172,557m, and total liabilities are 106,723m. The total of 65,834m. The working capital ratio is 1.62. In the previous report of January 03, 2021, JNJ's total assets were 174,894m, and total liabilities were 111,616m. The total of 63,278m. The working capital ratio was 1.57. This shows that the company is on the positive side and has a healthy working capital.

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References

Brody, B. (2021, March 31). Johnson & Johnson Named a 2021 Fortune World's Most Admired Company. Content Lab U.S. https://www.jnj.com/latest-news/johnson-johnson-named-a2021-fortune-worlds-most-admired-company. Mergent. (n.d.). Johnson & Johnson. (NYS: JNJ) Retrieved May 14, 2021, from https://wwwmergentonline-com.ezproxy.snhu.edu/companydetail.php? compnumber=4593&pagetype=synopsis Titman, S., Keown, A. J., & Martin, J. D. (2018). Pearson Custom. https://etextise.pearson.com/courses/6470567/products/FLLFUHL5GKZ/pages/accdc75d19de95 0db6384231481e0c99a7e9ed5bd? locale=&isTpi=Y&key=31947207511940148424232021&iesCode=zC6ZxjEKQ1....