The aim of this project is to produce a report which looks at the application of accounting theory to practice in F 011 Motors Ltd. Fort Motors Ltd. is a Main Ford Dealership located in the Walkinstown area of Dublin. Retail Motor Dealers consist of many departments. Each of these departments each require a level of stocks and or debtors or creditors. Debtors, Inventories and cash and cash equivalents are the components which constitute working capital. The aggregate amount of Inventories plus amounts receivable and cash, minus creditors and payables is known as net current assets or net working capital. The level of the investment in debtors and stocks is dependant on the firms credit policy. Credit policy has an important impact on the volume of sales, and the optimal policy involves a trade off between the costs inherent in various credit policies and the profits generated by higher sales. In the analysis of the company practice there is evidence which suggests that a loose policy of working capital management is the norm in the business. This is not necessarily detrimental to the firm however as the introduction of complicated or even straight forward economic theories may not benefit the company more than the costs incurred.