Which of the following would immediately improve the working capital of a business?
(A) Increasing credit sales
(B) Using sale and lease back
(C) Preparing a cash flow statement
(D) Repaying debt to creditors more quickly - HSC - SSCE Business Studies - Question 6 - 2013 - Paper 1
Question 6
Which of the following would immediately improve the working capital of a business?
(A) Increasing credit sales
(B) Using sale and lease back
(C) Preparing a cash... show full transcript
Worked Solution & Example Answer:Which of the following would immediately improve the working capital of a business?
(A) Increasing credit sales
(B) Using sale and lease back
(C) Preparing a cash flow statement
(D) Repaying debt to creditors more quickly - HSC - SSCE Business Studies - Question 6 - 2013 - Paper 1
Step 1
Using sale and lease back
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Answer
Using a sale and leaseback arrangement allows a business to sell its assets (typically property or equipment) and then lease them back, providing immediate cash inflow. This action increases the working capital by converting illiquid assets into cash, which can be used for operational needs or other investments. Therefore, this option is the best choice for improving working capital immediately.