Title: Working Capital Management: Everything You Need to Know | Cleverism
Headings: Working Capital Management: Everything You Need to Know
Working Capital Management: Everything You Need to Know
INTRODUCTION TO WORKING CAPITAL MANAGEMENT
1) Definition of Working Capital
2) Types of working capital
3) Objectives of working capital management
THE WORKING CAPITAL CYCLE
Cash
Creditors and Debtors
Inventory
Properties of a healthy working capital cycle
APPROACHES TO WORKING CAPITAL MANAGEMENT
SIGNIFICANCE OF ADEQUATE WORKING CAPITAL
FACTORS FOR DETERMINING THE AMOUNT OF WORKING CAPITAL NEEDED

Content: The accounts receivables need to be collected on time in order to maintain the flow of cash. It is also extremely important to ensure timely payouts to the creditors to ensure smooth functioning of the business. Liquidity: Maintaining the liquidity along with some room for adjustments is another important aspect that needs to be kept in mind for the smooth functioning of the working capital cycle. APPROACHES TO WORKING CAPITAL MANAGEMENT
The short-term interest rates are, in most cases, cheaper compared to their long-term counterparts. This is due to the amount of premium which is higher for short term loans. As a result, financing the working capital from long-term sources means more cost. However, the risk factor is higher in case of short term finances. In case of short-term sources, fluctuations in refinancing rates are a major cause for concern, and they pose a major threat to business. There are mainly three strategies that can be employed in order to manage the working capital.