Form FIS0321 Working Capital Calculation - Michigan

What Is Form FIS0321?

This is a legal form that was released by the Michigan Department of Insurance and Financial Services - a government authority operating within Michigan. As of today, no separate filing guidelines for the form are provided by the issuing department.

FAQ

Q: What is working capital?
A: Working capital is the measure of a company's liquidity and short-term financial health. It represents the difference between a company's current assets and current liabilities.

Q: How do you calculate working capital?
A: Working capital is calculated by subtracting a company's current liabilities from its current assets.

Q: Why is working capital important?
A: Working capital is important because it indicates a company's ability to meet its short-term obligations and fund its day-to-day operations.

Q: What are some examples of current assets?
A: Examples of current assets include cash, accounts receivable, and inventory.

Q: What are some examples of current liabilities?
A: Examples of current liabilities include accounts payable, short-term loans, and accrued expenses.

Q: How can a company improve its working capital?
A: A company can improve its working capital by increasing its current assets or by decreasing its current liabilities.

Q: What does a positive working capital indicate?
A: A positive working capital indicates that a company has sufficient current assets to cover its current liabilities.

Q: What does a negative working capital indicate?
A: A negative working capital indicates that a company may have difficulty meeting its short-term obligations.

Q: Is working capital the same as profit?
A: No, working capital and profit are different. Profit reflects the company's earnings, while working capital focuses on its liquidity.

Q: How often should a company calculate its working capital?
A: A company should regularly calculate its working capital to assess its financial health and make informed business decisions.