Working Capital Management

Working Capital Management Working capital refers to the cash a business requires for day-to-day operations, or more specifically, for financing the conversion of raw materials into finished goods, which a company sells for payment. Working capital management involves the relationship between a firm's short-term assets and its short-term liabilities. The importance of a well-rounded working capital cycle is crucial in today's business environment. Importance of Working Capital Management The goal of working capital management is …showed first 75 words of 395 total…

…showed last 75 words of 395 total…of raw materials. This is followed by a long-drawn-out manufacturing and testing phase, after which a sale is concluded. The materials and labor costs are incurred "up-front". The money spent on expenses is usually more cash then they generate. Conclusion Managing working capital can be a major challenge for some businesses. Working capital management is crucial in today's business environment. However, managing it well can have a substantial impact on a business' assets and financials.