Derek Is Paul's Reporting Manager

question 8

Essay

Derek is Paul's reporting manager. Paul is efficient at his work. Since Derek will be transferring to another department soon, the management has decided that Paul will become the next manager. Although Paul has been a good employee, he has never had the chance to develop leadership qualities. Therefore, Derek has been instructed to train Paul and help him develop effective managerial skills. What are the best avenues that Derek could use to train Paul given that they already know each other, and that Derek will be transferred in two months?

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Definitions:

Working Capital

Current assets minus current liabilities, representing the short-term liquidity and operational efficiency of a business.

Current Ratio

An indicator of financial health showing whether a business can cover its short-term debts with assets that can be quickly converted into cash.

Acid-Test Ratio

A stringent indicator of a company's short-term liquidity, calculated by dividing liquid assets by current liabilities.

Times Interest Earned

This is a financial ratio that measures a company's ability to meet its debt obligations by comparing its interest expenses to its earnings before interest and taxes.