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Working Capital Management and Control

Presentations | English

Business requires adequate capital to succeed in business environment. Working capital management is defined as current assets minus current liabilities. It is a business strategy and primary purpose of companies to effectively make use of and to control current assets and sufficient cash flow to meet short term operation costs and short-term debt obligations. It involves tracking various ratios including the working capital ratio, the collection ratio and the inventory ratio. It helps to maintain the smooth operation of the net operating cycle, also known as cash conversion cycle. It can improve and control a company’s cash flow management and earnings quality through efficient use of its resources. Three ratios that are important in working capital management are working capital ratio or current ratio, the collection ratio and the inventory turnover ratio.

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Lumens

12.00

Lumens

PPTX (48 Slides)

Working Capital Management and Control

Presentations | English