Title: 3 Working Capital Management Strategies For Your Business - QuickBooks
Headings: 3 Working Capital Management Strategies For Your Business
3 Working Capital Management Strategies For Your Business
What is Working Capital Management?
Strategies to Manage Working Capital
1. Inventory Management
2. Cash Management
3. Accounts Receivable Management

Content: Therefore, a business needs to emphasize on two perspectives while managing working capital. First is the amount of net current assets or working capital
Second is the method of financing working capital
Therefore, funds are required in order to run day-to-day operations of the business. And a business needs to maintain optimum level of working capital in order to achieve the objectives of profitability and liquidity. Therefore, the goal of working capital management is to manage a business’ current assets and current liabilities in such a way so that a satisfactory level of working capital is maintained. Now, a business needs to consider certain principles while managing working capital. These principles include principles of: Risk
Return on equity
Cost of Capital
Payment Maturity
Thus, a business needs to maintain sufficient amount of current assets so that it is able to meet its short term obligations. Similarly, every penny invested in the form of working capital should enhance the net worth of the business. Likewise, the cost of capital should be considered while managing working capital. It should be noted that as the amount of risky capital increases, the cost of capital decreases.