We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Management of Working Capital - Essay Example

Comments (0)
Summary
An efficient management of working capital aims towards maintaining an optimum balance of the various components of working capital (Filbeck & Krueger, n.d.).Success…
Download full paper
GRAB THE BEST PAPER
Management of Working Capital
Read TextPreview

Extract of sample
Management of Working Capital

Download file to see previous pages... A discussion relating to working capital cycle, methods of managing working capital, working capital management in UK companies and suggestions for improvement has been presented below.
The working capital of the business is defined as the net of current assets over current liabilities. It is an important liquidity measure of the firm. The current assets include not only cash, receivables but also inventories as it can be easily liquidated whereas the current liabilities include short term loans and creditors (University of California, n.d.). A business with scarce working capital faces difficulty in meeting its short term obligations from the available cash resources if there is a sudden or continuous fall in sales. Therefore, it is important to maintain an optimum amount of working capital in the business and it must be carefully monitored by the managers (Nix & McFetridge, n.d.).
Working capital forms an important part of a firm’s operations. Maintaining an ideal level of inventory ensures that the firm does not have to face the problem of material deficit in meeting its production targets. Similarly the receivables figure in the balance sheet indicates the willingness of the firm to extend goods on credit. As credit sale is risky the management must be careful in the choice of debtors.
Working capital consists of current assets like cash, inventory and current liability like creditors and short term loans. The pattern of all the above components of working capital varies with the business cycle. When there is a fall in the market demand there is a rise in the stock of finished goods. Later when this fall in demand takes the form of recession the firm lowers the stock of inventories, delays the payment of loans and accelerates the realization of receivables. This implies that with the worsening of the recession there is a decrease in the working capital. Therefore the efficient management of working ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Working capital management
Working Capital Management Introduction Working capital management is a complex process through which a company ensures that it maintains sufficient cash inflows in order to meet its short term debt obligations as well as operating expenses. In other words, the system of working capital management intends to establish a relationship between a firm’s current assets and current liabilities.
7 Pages(1750 words)Essay
Working Capital Management
The study will look at the different advantages that are accrued by financial institutions in relation to their account receivables and their loan lending capacities. It will look at the financial growth and maturity of Citibank Indonesia, and the various strategies incorporated to deal with sovereign risk limits.
15 Pages(3750 words)Essay
Working Capital Management Essay
Lawrence Sports has two suppliers, Gartner and Murray. Gartner supplies Lawrence Sports with 70% of its materials and is therefore very important to the success of the company. Lawrence Sports is Murray's major customer comprising of 75% of sales for Murray and therefore is willing to do anything to please Lawrence Sports to keep them as a customer.
2 Pages(500 words)Essay
Working Capital Management
Second, the large holding of current assets, especially cash, strengths the liquidity position but also reduces overall profitability. Third, levels of fixed and current assets depend upon the expected sales, but it is only current assets which can be adjusted with sales fluctuations in the short run therefore company has greater flexibility in managing current assets.
4 Pages(1000 words)Essay
Literature Review on Working Capital Management
Therefore, working capital management is a routine activity and financial manager has to pay more attention to working capital than fixed assets. This paper takes a literature review of the various issues of working capital management, about which previous studies have been done.
5 Pages(1250 words)Essay
Working capital management - a business organizations success
While holding ample amount of working capital is suitable in order to prevent the risk of illiquidity holding too much also hinders the business organization in undertaking profitable investments. Thus, the business arena has increasingly been putting emphasis on balancing working capital.
2 Pages(500 words)Essay
Working capital management
Research philosophy describes the way I think about the development of knowledge which affects the way I go about doing research. There are three types of research philosophies: positivism, Interpretivism and realism. My research is based on mixtures of all these
12 Pages(3000 words)Essay
Working Capital Management Practices
rent working capital policies of the firm can be mostly considered as conservative in nature as Family Dollar employ most of its own internally generate funds to finance its working capital needs. Such practice may be healthy as the firms often attempt to save finance cost if
4 Pages(1000 words)Essay
Working Capital Management
After passing through the situation of demand crisis in the automobile markets, the company has been effective managing its free cash
1 Pages(250 words)Essay
Management of Working Capital Case Study: George's Trains
Furthermore, the paper shall critically analyze its cash flow statement to determine the pertaining trend of the organization and provides suggestion to sustain profitability of the company. Analyzing the video it can be observed that the Geroge’s business is
3 Pages(750 words)Coursework
Let us find you another Essay on topic Management of Working Capital for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us