Working Capital Management - Best Practices

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Working capital management is a process which is designed
to ensure that and organization operates efficiently
by monitoring & utilizing its current assets and current liabilities to the best effect.
through efficient use of its resources.

PRIMARY OBJECTIVE  OF WORKING CAPITAL MANAGEMENT IS TO ENABLE A COMPANY MAINTAINING SUFFICIENT CASH FLOWS IN ORDER TO MEET ITS DAY TO DAY OPERATING EXPENSES AND ITS SHORT TERM OBLIGATIONS.

Working capital management can improve 
cash flow management and 
earnings quality 
through efficient use of its resources. 






Management of working capital includes: 

Working Capital Management
Cash (Treasury) Management
Inventory Management 
Receivables Management and 
Payables Management


Working Capital Management requires 

monitoring a company's assets and liabilities 
to maintain sufficient cash flow. 


The strategy involves tracking three ratios: 

Working capital ratio, 
Collection ratio, and 
Inventory ratio.

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