Economic Analysis: Theory and Practice

Economic substance of working capital as an object of accounting and analysis

Vol. 17, Iss. 4, APRIL 2018

Received: 5 February 2018

Received in revised form: 12 February 2018

Accepted: 20 February 2018

Available online: 27 April 2018

Subject Heading: SCHOLAR DISPUTE

JEL Classification: O12, Q01

Pages: 768–782

Savitskaya G.V. Belarus State Economic University, Minsk, Republic of Belarus

ORCID id: not available

Gudkova E.A. Belarusian State Agricultural Academy, Gorki, Republic of Belarus

ORCID id: not available

Importance Recently, the concepts of working capital and current assets have been interpreted differently in economic literature. The lack of uniformity in terminology causes a gap in information flows that are generated in the accounting system and required for analysis and efficient financial management. This fact necessitates a deeper examination of their economic nature, substance and content.
Objectives We focus on a comprehensive study of problematic issues related to defining the economic substance of working capital based on its key parameters.
Methods Works of domestic and foreign economists on finance and capital management serve as a theoretical and methodological framework for the study. We employ historical approach, general and special methods of analysis, synthesis and analogies.
Results In the paper, we present our own position on defining the economic substance of current assets and working capital categories, their content and identification.
Conclusions The offered approach may contribute to further development of methods of financial analysis and serve as a methodological guidance for business entities to exercise control and make business decisions in their management of working capital.

Keywords: current assets, working capital, investment value, turnover, capital cycle


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Vol. 17, Iss. 4
April 2018