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Working capital is an important asset of a commercial organization and to be successful, the organization (or rather its staff) should ensure that its use is optimized. This is important to ensure that the organization can function properly. If the organization is cash rich, the cash should be managed to ensure the best return, e.g utilizing methods like Dynamic Discounting. If the organization is in debt, to avoid excessive interest charges.

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What does working capital management encompass?

distinguish between temporary and permanent working capital?


Working capital management is primarily concerned with the management and financing of?

Current assets.


What are the three types of financial management decisions and what questions are they designed to answer?

The three types of financial management decisions include capital structure, capital budgeting and working capital. They are designed to answer the main source of capital used to run the firm.


Why do firms need to invest in net working capital?

there is a need to invest in net working capital because net workin capital represents the surplus working capital left with the company after payment of current liablities, hence more net working capital means company has surplus money for its day to day operations


Define working capital demand loan?

Working capital is said to be the life blood of a business. Working capital, signifies funds required for day-to-day operations of the firm. In financial literature, there exists two concepts of working capital, namely gross concept and net concept. According to gross concept, working' capital refers to current assets viz, cash, marketable securities, inventories of raw material, work-in-process, finished goods and receivables. According to net concept, working capital refers to the difference between current assets and current liabilities. Ordinarily, working capital can be classified into fixed or permanent and variable or fluctuating parts. The minimum level of investment in current assets regularly employed in business is, called fixed or permanent working capital and the extra working capital needed to support the changing business activities is called variable, or fluctuating working capital. What is the nature and the scope of working capital decisions? What are the important dimensions of working capital management? What are the basic decision criteria, principles and approaches applicable in the field of working capital management? In this chapter, we shall take up each of these questions and thus take an overview of working capital management.

Related Questions

What are working capital management theories?

various theories of working capital management.


What does a financial executive devote the most time to?

Working capital management decisions.


What does working capital management encompass?

distinguish between temporary and permanent working capital?


Could show Project report on working capital management of a bank?

Could show Project report on working capital management?


Managing short term asset and liabilities is sometimes called ------- management?

Management of short term assets (current assets) and short term liabilities (current liabilities) is commonly known as working capital management.Working capital is a requirement of funds to meet the day to day working expenses. In a simple term working capital is an excess of current assets over the current liabilities. In working capital management we focus more on receivables management, cash management and inventory management etc. Proper way of management of working capital is highly essential to ensure a dynamic stability of the financial position of an organization.


Can you give me some research topics on working capital management?

Certainly! Research topics on working capital management could include the impact of working capital strategies on firm profitability, the relationship between inventory management practices and cash flow efficiency, and the effects of economic fluctuations on working capital requirements in different industries. Additionally, exploring the role of technology in optimizing working capital management processes or the influence of corporate governance on working capital decisions could yield valuable insights.


Working capital management is primarily concerned with the management and financing of?

Current assets.


What are the objectives of working capital management?

Working capital management involves the relationship between a firm's short-term assets and its short-term liabilities. The goal of working capital management is to ensure that a firm is able to continue its operations and that it has sufficient ability to satisfy both maturing short-term debt and upcoming operational expenses. The management of working capital involves managing inventories, accounts receivable and payable, and cash.


Explain various components of working capital management?

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What is overtrading in working capital management?

overtrading is trading by an organization beyond the resources provided by its existing capital


How to compose a literature review on working capital management?

To compose a literature review on working capital management, you have to pull your thoughts together. You have to write about the different factors and how they affect the literature review on working capital management.


How do you prepare a project report on working capital management?

Just download from Google.