PPT: Management of Working Capital | Financial Management & Strategic Management for CA Intermediate PDF Download

 Page 1


Working Capital  :- Meaning
• Working capital typically means the fir m’ 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.
Page 2


Working Capital  :- Meaning
• Working capital typically means the fir m’ 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.
Working capital management
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.
Page 3


Working Capital  :- Meaning
• Working capital typically means the fir m’ 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.
Working capital management
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
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.
Page 4


Working Capital  :- Meaning
• Working capital typically means the fir m’ 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.
Working capital management
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
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
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.
Page 5


Working Capital  :- Meaning
• Working capital typically means the fir m’ 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.
Working capital management
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
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
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.
Definition of Working capital
Working Capital refers to that part of the fir m’ 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