Working Capital Management

Published on June 22, 2020
  • Working Capital of a company is the capital that is utilized by a company to finance its day to day operations. It is the measure of a company’s liquidity. Working Capital is also known as the Net Working Capital.
  • Working Capital = Current Assets – Current Liabilities
Current Assets are those assets that can be liquidated or converted to cash within a year and Current Liabilities are the liabilities or debts that are due for payment within a year.

Working Capital Management

  • Working Capital Management is the process to ensure that company is having sufficient funds to manage its day to day activities, this is achieved by monitoring of the company’s current assets and current liabilities. It also ensures that the company’s assets are put to productive use instead of lying idle.
  • Working Capital Management has to objectives as below:
    1. Ensure Availability of Sufficient Funds in the company for financing day to day operations.
    2. Ensure Productive Use of the Assets of the company to generate maximum returns.

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ramandeep singh

My name is Ramandeep Singh. I authored the Quantitative Aptitude Made Easy book. I have been providing online courses and free study material for RBI Grade B, NABARD Grade A, SEBI Grade A and Specialist Officer exams since 2013.

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