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: There would be no cases of default in paying the trade payable on due date because of proper management and allocation of cash. Improves Financial Health
Working capital management basically deals with the management of cash in an enterprise. It assesses the sources of cash inflows and determines the outflow of cash in best possible manner. Proper allocation of cash makes a scope for the investment of remaining cash or in repaying short-term debts. It allows the business to be financially solvent at most of the times and thus evading any legal troubles that could have arisen due to lack of working capital. Higher profitability would imply higher return on capital employed. This, in turn, would attract more capital from prospective investors leading to the unlocking of further capacities. Value Addition
As explained earlier, working capital enhances company’s financial health and operational success. It makes the company a standout amongst its peers. A sense of respect emerges in the market for the business.