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The working capital management takes the concept of managing inventories, cash, receivables and payables and the short term funding. Inventory management is quite important for an organisation. Maintaining a high level of inventory can incur higher cost for the firm, while a low inventory level can put a hindrance on the way to meet the customer needs. So it is very much necessary to have ideal inventory level to meet the customer demands at a minimum possible cost. In a similar way, the receivables would indicate about the willingness of the organisation to offer products or services on credit based. This credit sale is quite risky if not managed well. On the other hand sometimes firms have to offer their products or services on credit basis, as that would fetch more customers to increase the business volume. This again is a risk return trade-off for the organisation.
Cash is an important component of the current assets on balance sheet. This is the most liquid asset that a company can avail in troubled situation. On the other end, having an excess level of cash can block to use that as operating capital. So having an optimum cash level is necessary for proper business functioning. Cash and short term securities management is very much needed from liquidity point of view. In all, a proper management of working capital is very much necessary to generate cash and improve profits at a reduced risk level.
The allocation can be changed with due change in the financial and operational environment. For an instance in recession time, firms would like to cut down their inventory levels, delay the debt payment and at the same time would like to accelerate the payments from debtors. So different periods can have different working capital needs. Even this can vary depending upon the industry or depending upon the size of the organisation. For an instance retail
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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.
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.
The short term assets and liabilities of a company i.e. Current Assets and current liabilities are an important determinant of a company's operational performance. Hence a company should pay a lot of attention to managing its current assets and current liabilities in order to remain in the business in a profitable manner.
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.
Profitability is the result of exploitation of assets to produce operative activities of the company so that revenue can be increased at as much decreasing costs as possible. On the other hand firm’s short term risks
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
Working capital management is an important element in this respect because it is crucial in successful organizational operations. Such management covers the interaction of the assets and liabilities, which are classified in two departments:
clinic (Gapenski, 2012). The working capital of Syndicate Company can have either a positive effect or a negative feedback, depending on the amount of debt that the clinic owes its creditors. Generally, Syndicate Company has more working capital that is why it is successful.
is to ensure that the business continues to be in operation by having the ability to pay short-term debts and operating expenses anytime they fall due. This involves managing payables, stock, cash and receivables. The Week 3 video assignment presents different strategies that
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