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March 18, 2026The Accounting Review

The Working Capital Concept.

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Authors

PFPhilip E. FessUniversity of Illinois Urbana-Champaign

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Implication

Analysis highlights the importance of operating cycles for assessing firm liquidity and obligations.

Key Points

  • This work examines the evolution and current understanding of the working capital concept, focusing on its implications for liquidity management.
  • Discussed changes in the definition of working capital over the years.
  • Analyzed the perspective shift from liquidation to operating cycle.
  • Explored how working capital should be measured and presented over time.
  • Current assets are now viewed in relation to firm operations rather than just liquidation.
  • The operating cycle is emphasized as key to meeting maturing obligations.
  • Working capital presentation helps indicate the financial buffer available at any time.

Cite This Study

Philip E. Fess (1966) studied this question.

synapsesocial.com/papers/69ba420a4e9516ffd37a1fe8https://doi.org/10.2308/tar-4487362
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1THE WORKING CAPITAL CONCEPT--A RESTATEMENT.1962
  2. 2WORKING CAPITAL AND THE OPERATING CYCLE.1951 · 1 citations
  3. 3A Study on Working Capital Management2024
  4. 4Double-Entry and Working Capital Analysis.1966
  5. 5Working Capital: Development of the Field through Scientific Mapping: An Updated Review2024 · 10 citations