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The matter includes concept and types of Working Capital. Further it explains Optimum Level of Current Assets, Various Approaches to Working Capital Financing. Then Operating Cycle, Cash Cycle and Working Capital Estimation Techniques are discussed.
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it is useful for MBA 2nd semister students. they didn't know the proper information about the working capital management. so , that's why i prepare the some introduction part for this concept.
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In simple language working capital can be described as the funds required by an enterprise to finance its day-to-day operations. The working capital of a business is calculated by deducting current liabilities from current assets. Hence, an enterprise has a working capital surplus if its current assets are more than current liabilities. On the other hand, if the current assets are less than current liabilities, the business has a working capital deficiency.
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INTRODUCTION SOURCES OF FUNDS SHORT TERM FINANCE - PURPOSES SHORT-TERM SOURCES OF FUNDS -Trade Credit -Bank Credit -Customer’s Advances -Instalment Credit -Loans from Co-operatives -Indigenous Bankers -Factoring -Accrued Expenses -Differed Incomes -Commercial Papers -Letter of Credit -Public Deposits CONCLUSION
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it is useful for MBA 2nd semister students. they didn't know the proper information about the working capital management. so , that's why i prepare the some introduction part for this concept.
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In simple language working capital can be described as the funds required by an enterprise to finance its day-to-day operations. The working capital of a business is calculated by deducting current liabilities from current assets. Hence, an enterprise has a working capital surplus if its current assets are more than current liabilities. On the other hand, if the current assets are less than current liabilities, the business has a working capital deficiency.
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Introduction Working capital typically means the firm’s holding of current or short-term assets such as cash, receivables, inventory and marketable securities. These items are also referred to as circulating capital Corporate executives devote a considerable amount of attention to the management of working capital Definition Working Capital refers to that part of the firm’s capital, which is required for financing short-term or current assets such a cash marketable securities, debtors and inventories. Funds thus, invested in current assets keep revolving fast and are constantly converted into cash and this cash flow out again in exchange for other current assets. Working Capital is also known as revolving or circulating capital or short-term capital. Nature Of Working Capital Working capital management is concerned with the problems that arise in attempting to manage the current assets, the current liabilities and the interrelations that exist between them. Current assets refer to those assets which in the ordinary course of business can be, or will be, converted into cash within one year without undergoing a diminution in value and without disrupting the operations of the firm. Examples- cash, marketable securities, accounts receivable and inventory. Current liabilities are those liabilities which are intended, at their inception, to be paid in the ordinary course of business, within a year, out of the current assets or the earnings of the concern. Examples- accounts payable, bills payable, bank overdraft and outstanding expenses.
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Working Capital Management
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OPERATING CYCLE Receivable
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OPERATING ENVIRONMENT OF
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50.
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