Due Tuesday at 12 noon
After reading your report, as well as comments by others on the teams, the Genesis team began to understand the importance of cash flow and financing in high-growth scenarios. The Genesis accountant suggested that the focus should be on developing a financial strategy that would ensure operational needs are met through short-term financing. The Genesis team instructed Sensible Essentials to explain in basic terms the factors and mechanics necessary to determine short-term financing needs.
As the finance expert for Sensible Essentials, do the following:
- Explain the concept of working capital and it’s important to Genesis.
- Describe the mechanism and methodology used to ensure that operational needs are met through short-term financing. Explain why this methodology is important to Genesis.
- Explain how working capital represents the assets that are needed to carry out the day-to-day operation and how working capital can act as a source of financing or increase the need for financing.
In your response, be sure to consider the time value of money and the relative advantages and disadvantages of short-term loans versus internally generated funds.
Write your initial response in 3–4 paragraphs. Apply APA standards to citation of sources.