Capital Structure Of Oil And Gas Industries

Working capital is of major importance to a business because it controls the current day-to-day operations including payment of salaries, wages, inventory, raw materials, other business expenses, purchase of stocks, buildings, land, fixed assets, etc.

For this week’s reflection, please write three complete and well composed paragraphs and, in your own words (do not quote from a book or website) explain what working capital is and why it is important for a business. As an example, describe a business that operates where you live and describe how knowing what the working capital of that company would be useful to the business leaders of that company and to outside investors.

George 's Train Shop is a family owned business that focuses on the sales and repairs of train toys. George is running a profitable business, but as he is aware of my MBA Managerial Finance class, he has asked for advice on his working capital practices. Although George is currently enjoying the benefits of a profitable business, there are opportunities for him to expand his business ventures. This first starts by dissecting degree of aggressiveness in working capital practices, current capital budgeting practices, and areas where he can improve in both arenas. In addition, careful management of the company 's cash flow will


3)Working Capital
: Working Capital is considering what the best way would be in terms of a management for short-term resources and obligations. The concept of this decision focuses on if it is possible to maintain enough capital for payments of its bills including and extra money earned as interest. Current assets and current liabilities are considered as the part of this decision.

Capital structure long term is looking at how assets for the business should be paid for. Through the article the common theme is to more efficiently change working capital into cash that can be used to pay for the debt and liabilities for the business. By converting the working capital into cash, the business can make payments without having to take out an extra loan or take on more debt for the business. The working capital management is evaluating the day-to-day finances of the firm and how to make sure it is paid for. Again converting working capital into tangible resources that can be used to pay for the firm is key to covering the businesses operating expenses day to day in this economy. It is more profitable for the company to do this. This will not change the overall total value of assets, but it would shift assets from being fixed into being current. Having more current assets creates a larger net working capital for the business, which is beneficial to them. Determinants of the businesses growth include total asset turnover and the dividend policy. The total asset turnover will be increased if the tips in this article are complied with. This is because having current assets that can and will be used increases this amount. The dividend policy is about choosing how much to pay shareholders versus reinvesting

Capital budgeting is a long-term schedule that decides what investment projects to choose. When an option is selected, a company decides where and how to obtain the funds to support its investment and a way of determining the capital structure. A company should make sure it has access to working capital to maintain it operations daily. If this is not available, the company will not be able to maintain it daily operation until

As a result, holding cash would be essential component of the firm strategy. To develop new products, buy new equipment or expand geographically, firm has to spend money on marketing research, product design, prototype development and so on. Moreover, if a recession hits and the economy start to slow down,

Poor cash management is the most frequent stumbling block that causes business failure (Anon., 2013). Good cash management comes from knowing when, where, and how cash needs will occur. Knowing the best sources for cash is vital to being prepared to meet needs as they arise. This requires good relationships with bankers and creditors. Developing and maintaining cash flow projections helps to understand how cash is generated and used in a business. Without understanding the cash flow of a business, the business is doomed for failure.

As we have learned in previous modules, cash is one of the most important assets for any business because it easily can be converted or exchanged to any other type of asset or service. So, when cash is not managed correctly, it can generate serious problem and unbalances to the company that could lead to bankruptcy if they are not detected and fixed on time. So, one effective way to managed cash appropriately is by keeping track of how cash is being used and the cash flow will provide details of the business financial activities.

Similarly, the working capital ratio is a metric that is utilized for the purpose of appraising the liquidity position of a commercial entity (Robinson). A review of the working capital of the two companies confirms that they had a positive working capital in 2014, but a negative one in 2015 (Yahoo.com). The outcome suggests that the liquidity position of the organization has deteriorated. Thus, the two commercial entities are likely to experience challenges with respect to meeting short-term obligations.

This assignment consists of a profitable business ran by a man name “George.” George is aware that we are in a MBA Managerial Finance class and he needs advice on his working capital practices. George would like the answers to the following:

The management of cash is essential to the survival of any organization. Managing an organization’s financial operation requires knowledge of the economy and ways to maximize revenue. For any organization to operate on a daily basis adequate cash flow is required. Without cash management the organization will be unable to function because there is no cash readily available in case of inconsistencies in the market. Cash is also needed to keep the cycle of the company’s operations going.

One of the most fundamental business strategies used to increase your Net Working Capital is simply to sell your products for more then you paid for it. Or sell your services for more than the cost to provide them.

Working capital is the life blood and operational hub of a business . only a dissemination of a blood is vital in the human body for looking after life, working capital is exceptionally crucial to keep up the smooth running of a business. No business can run effectively without a satisfactory measure of working capital. The fundamental points of interest of keeping up satisfactory measure of working capital are as per the following:

The oil and natural gas sector is constituted of three major components – upstream, midstream and downstream. The upstream industry includes exploration and production, midstream includes processing, storing and transporting while the downstream industry includes oil refineries and distribution. It provides consumers with various products like petroleum, gasoline, diesel, lubricants. The purpose of our project is to study the downstream oil and natural gas sector industry environment, that is, oil refining and distribution in India. The Indian oil and gas sector is one of the six major industries in India that have a huge impact on the country’s economy. We, in this project, have made an attempt to identify