Title: Working capital - Wikipedia
Headings: Working capital
Working capital
Contents
Calculation
Inputs
Working capital cycle
Definition
Meaning
Working capital management
Decision criteria
Management of working capital
See also
References
External links

Content: Working capital management
Corporate finance

Working capital
Cash conversion cycle
Return on capital
Economic value added
Just-in-time
Economic order quantity
Discounts and allowances
Factoring
Reverse factoring
Sections
Managerial finance
Financial accounting
Management accounting
Mergers and acquisitions
Balance sheet analysis
Business plan
Corporate action
Societal components
Financial law
Financial market
Financial market participants
Corporate finance
Personal finance
Peer-to-peer lending
Public finance
Banks and banking
Financial regulation
Clawback
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Decisions relating to working capital and short-term financing are referred to as working capital management. These involve managing the relationship between a firm's short-term assets and its short-term liabilities. The goal of working capital management is to ensure that the firm is able to continue its operations and that it has sufficient cash flow to satisfy both maturing short-term debt and upcoming operational expenses. A managerial accounting strategy focusing on maintaining efficient levels of both components of working capital, current assets, and current liabilities, in respect to each other. Working capital management ensures a company has sufficient cash flow in order to meet its short-term debt obligations and operating expenses. Decision criteria
By definition, working capital management entails short-term decisions—generally, relating to the next one-year period—which are "reversible". These decisions are therefore not taken on the same basis as capital-investment decisions ( NPV or related, as above); rather, they will be based on cash flows, or profitability, or both. One measure of cash flow is provided by the cash conversion cycle —the net number of days from the outlay of cash for raw material to receiving payment from the customer. As a management tool, this trash
metric makes explicit the inter-relatedness of decisions relating to inventories, accounts receivable and payable, and cash.