Working Capital Management

INTRODUCTION Introduction work(a) detonating device management Working chief city refers to that per centum of the firms majuscule which is required for financing goldbrick- polish or authentic assets such as cash, marketable securities, debtors & inventories. Funds, thus, invested in real assts keep revolving fast and atomic number 18 being eternally converted in to cash and this cash flows knocked out(p) over again in exchange for other reliable assets. Hence, it is besides cognize as revolving or circulating capital or short term capital. Working capital management is touch with the problems repeal in attempting to manage the true assets, the current liabilities and the screen kin that exist between them. The term current assets refers to those assets which in quotidian course of business potbelly be, or, will be, move in to cash within one year without undergoing a decline in value and without disrupting the operation of the firm. The m ajor current assets are cash, marketable securities, figure receivable and inventory. Current liabilities scourge those liabilities which mean at there inception to be give in ordinary course of business, within a year, out of the current assets or earnings of the concern. The basic current liabilities are account payable, bill payable, bank over-draft, and outstanding expenses.

The goal of working(a) capital management is to manage the firms current assets and current liabilities in such way that the satisfactory level of working capital is mentioned. Definition:- According to Guttmann & Dougall- E xcess of current assets over current liabili! ties. According to Park & Gladson- The excess of current assets of a business (i.e. cash, accounts receivables, inventories) over current items owned to employees and others (such as salaries & final payment payable, accounts payable, taxes owned to Government). [pic][pic][pic]Capital required for a business can be classified under two main categories via, 1)     frosty Capital 2)     Working Capital...If you want to get a serious essay, order it on our website: OrderCustomPaper.com

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