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Net Working Capital Is Often Thought of as the Balance

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Essay

Net working capital is often thought of as the balance of completely liquid assets and liabilities.However, this is not completely true.Please explain why parts of working capital can become stagnant and hurt cash levels, even if a firm is growing and profitable.


Definitions:

Investment Banker

Underwrites new issues of securities for corporations, states, and municipalities.

Securities

Financial instruments that represent ownership positions in corporations (stocks), creditor relationships with governmental bodies or corporations (bonds), or rights to ownership as represented by options.

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