Description

Working capital management involves overseeing a company's assets and liabilities to ensure it maintains enough cash flow for short-term operational costs and debt obligations. It focuses on managing accounts receivable, accounts payable, inventory, and cash, while tracking ratios like the working capital ratio, collection ratio, and inventory turnover. Effective management improves cash flow and earnings quality by optimizing resource use. Strategies in working capital management may face challenges from market fluctuations or trade-offs between short-term gains and long-term success. Managing accounts receivable is crucial for short-term liquidity, involving credit policy management, payment monitoring, and collection improvement. The collection ratio measures the average days to receive payment after credit sales, affecting cash accessibility and potential growth. This comprehensive book is valuable for university and college teachers, chartered accountants, company secretaries, M.Com., B.Com., MBA students, and professionals in financial management and research. It serves as a practical reference for understanding and implementing effective working capital management strategies.