Working Capital Management

Girlie Knicole Castro

BSBA-III

Assignment in FM-1

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.

Working capital management is the device of finance. It is related to manage of current assets and current liabilities. After learning working capital management, commerce students can use this tool for fund flow analysis. Working capital is very significant for paying day to day expenses and long term liabilities. 

Reaction

Working Capital Management deals with managing the short term and long term capability of the firm’s capital. Its goal is to ensure how long the firm will continue and its business lifespan. How long its capital can satisfy the needs of the firm both maturing short-term debt and upcoming operational expense.

Current As

Current asset management 

The handling of the current assets of a company. Any assets that a company or business has that is the equivalent of cash or can be liquidated into cash in the period of a year is considered a current asset. Typically, current assets are the inventory a company has, as well as the accounts receivables and any short-term investments it has in place.

The main principle in current asset management is to keep the proper flow of income and liability in balance. Managing current assets also takes into account the long-term investments of a company, but short-term assets, another name for current assets, is important in determining the liquidity of a company. The measure of liquidity is really the measure of how well and how fast a company can pay off its debts....