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: Instances like delay in paying accounts payable, lack of production would minimize by a substantial amount. This would give the business a competitive edge over its competitors. Enhance Profitability
Proper application of working capital management strategy would enhance the company’s profitability in the long run. The policy properly manages inventory so as to avoid any operational failures. Collection from trade receivables would be on time as receivables management is a key part of working capital management. 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.