Mickey

In: Business and Management

Submitted By tuyyo123
Words 267
Pages 2
1. A sole proprietorship is a business owned by one person. In a “sole” proprietorship, the owner has 100% control of the business. A partnership there are two or more owners. A corporation is not limited to one owner. Corporation can be one owner or more it may have an unlimited number of owners. There are several difference between sole proprietorship, partnership and corporation, but one of the main difference between these three is the issue of liability. Sole proprietors and partnerships have unlimited liability for business debts, lawsuits and other business-related obligations. This means sole proprietors are held personally liable for all debts incurred while operating the business. Creditors may go after a sole proprietor’s asset to settle a debt in the event of a lawsuit. For a Corporation this is different, if a company fails, owners won’t be required to pay the corporation’s vendors and creditors who are owed money from their personal assets. This reduces the risk so investors are more willing to invest in the company.

2. The goal of working capital management is to ensure that a firm is able to continue its operations and that it has sufficient ability to satisfy both maturing short-term debt and upcoming operational expenses. A good financial manager needs to evaluate the size, timing and risk of a future cash flow. These are very important things to consider. The financial manager tires to identify investment opportunities that are worth more to the firm than they will cost to acquire. The management of working capital involves managing inventories, accounts receivable and payable, and cash.…...

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