Working Capital.3.1

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Economic order quantity (EOQ) is a decision tool used in cost accounting. It’s a formula that allows you to calculate the ideal quantity of inventory to order for a given product. The calculation is designed to minimize ordering and carrying costs. 

When a company purchases goods on credit which needs to be paid back in a short period of time, it is known as Accounts Payable. It is treated as a liability and comes under the head ‘current liabilities’. Accounts Payable is a short-term debt payment which needs to be paid to avoid default.

Cash Flow Forecasting is the process of obtaining an estimate or forecast of a companys future financial position and is a core planning component of financial management within a company. It might sound obvious but the main output or deliverable of a cash flow forecasting process is a cash flow forecast. A cash flow forecast is a projection of an organisations future financial position based on anticipated payments and receivables. The process of deriving a cash flow forecast is called cash flow forecasting.

The float is the number of shares actually available for trading. Float is calculated by subtracting closely held shares -- owned by insiders, employees, the company's Employee Stock Ownership Plan or other major long-term shareholders -- from the total shares outstanding. At the right price, of course, the closely held shares may start to float. Funny how that works.