This is important, because it shows that the business is undercapitalized, based upon their low working capital figures. As a result, the company needs to remain more liquid, to be properly capitalized for future investments Table 17.3 Solution to a working capital problem in my organization

Problem identification

Low Working Capital

Analysis (investigation)

The working capital position of the company was affected by the total amounts of cash they invested in new inventory.

Conclusion to the analysis (results of the investigation)

The business needs to be able to control their cash position, to effectively manage their working capital.

The solution, listed as a set of SMART recommendations

NA

Strengths and weaknesses of the recommendations

The strength...

The weakness is that the company would invest in less inventory and other investments
The implications of the solution, if implemented

The solution of more effectively managing the cash will help the organization, to be able to invest in various long-term situations. While keeping their liquidity high enough that they do not face a number of challenges.

Bibliography

The Cash Flow Statement, n.d. Understanding Marketing and Financial Information, pp. 239 -- 256.

Financial Statements, n.d. Understanding Marketing and Financial Information, pg. 133.

Laddering, 2010, Free Dictionary. Available from: [25 September 2010].

Harvard Format. http://libguides.library.uwa.edu.au/data/files2/49275/Harvard%20LibGuide%20-%20All%20Examples%20PDF.pdf