Title: Working Capital Management: Components & Approaches
Headings: Working Capital Management
Working Capital Management
What is Working Capital Management?
Formula for Working Capital: “Current Assets – Current Liabilities”
Illustration to calculate working capital:
Components of the balance sheet: (Rs)
Factors effecting working capital:
Working capital Approaches:
Classification of Working Capital:
Working Capital in adequate amount:
Working capital cycle:
Working Capital Management:
Components associated with WCM:
A) Cash and Cash equivalents:
B) Management of inventories:
For better stock/inventory control:
C) Management of receivables:
Effectively managing accounts receivables:
D) Management of accounts payable:
Factors to consider:
Time and money concept in Working Capital:

Content: Working Capital Management: Components & Approaches
EduPristine > Blog > Working Capital Management
Working Capital Management
January 8 2018 Written By: EduPristine
What is Working Capital Management? Traditionally, investors, creditors and bankers have considered working capital as a critical element to watch, as important as the financial position portrayed in the balance sheet and the profitability shown in the income statement. Working capital is a measure of the company’s efficiency and short term financial health. It refers to that part of the company’s capital, which is required for financing short-term or current assets such a cash marketable securities, debtors and inventories. It is a company’s surplus of current assets over current liabilities, which measures the extent to which it can finance any increase in turnover from other fund sources. Funds thus, invested in current assets keep revolving and are constantly converted into cash and this cash flow is again used in exchange for other current assets. That is why working capital is also known as revolving or circulating capital or short-term capital. Formula for Working Capital: “