Title: Advantages and Disadvantages of Working Capital Management | eFinanceManagement
Headings: Advantages and Disadvantages of Working Capital Management
Advantages and Disadvantages of Working Capital Management
What is Working Capital Management?
Advantages of Working Capital Management
Ensures Liquidity
Evades Interruptions in Operations
Enhance Profitability
Improves Financial Health
Value Addition
Disadvantages of Working Capital Management
Only Monetary Factors
Non-Situational
Based On Data
Problem in Interpretation
Conclusion
Sanjay Bulaki Borad

Content: It speeds up the working capital cycle of a company and eases the liquidity position. The managers also try and extend the credit available from the accounts payables and thereby avails trade credit which is normally considered a free working capital up to a certain period. Table of Contents
What is Working Capital Management? Advantages of Working Capital Management
Ensures Liquidity
Evades Interruptions in Operations
Enhance Profitability
Improves Financial Health
Value Addition
Disadvantages of Working Capital Management
Only Monetary Factors
Non-Situational
Based On Data
Problem in Interpretation
Conclusion
Working Capital Management is an easily understandable concept which can be linked to an individual’s household. It’s like how an individual collects cash from his income and how he plans to expend it on his needs. Advantages of Working Capital Management
Ensures Liquidity
Businesses often get in trouble due to lack of cash needed for operations and to repay short-term debts. It happens because of an ineffective or no working capital management policy in the enterprise. Working capital management ensures liquidity by monitoring of account receivables, account payable, stock management and debt management. It assists in keeping sufficient liquid cash in the business at any point of time to pay operational costs and short-term debts. Thus, it helps in allocating the resources in an optimum manner.