PDSnet Glossary

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Introductory Technical Fundamental Economics Opinion Sectors International Regulatory Other Markets

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Definition

This refers to the people who manage a company, including the board of directors. The quality of management of a company is obviously critical to its success. Management can best be assessed by using the management ratios such as the debtors days outstanding and the stock turn ratios. These ratios will show how well management has handled their working capital management. Have they been diligent in the collection of the company's debts, or have they allowed debtors to get away with not paying? Have they kept stock levels to a minimum and yet not discouraged customers because they were out of stock? Excessive bad debts and obsolete and slow-moving stock are indications that critical areas of the business are not being well-managed. It is worth investigating the history and track record of the company's directors. You should also look to see whether they have any shares in the company.

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