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: 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. Hence, a business should make every effort to reduce the cost of capital while maintaining optimum level of working capital. Finally, the time gap between maturity of debt or payments and the inflow of cash should be minimum. Bigger the gap, the higher is the risk involved. Strategies to Manage Working Capital
Different elements of working capital such as bills receivable, cash, inventory etc need to be taken care of in order to manage working capital of a business. Let’s understand how each of these components are managed individually to have an optimum level of working capital.