Working Capital Management
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Working Capital Management

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Slides on Working capital Management

Slides on Working capital Management
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Working Capital Management Working Capital Management Presentation Transcript

  • Working Capital Management Presented By: Noorulhadi Qureshi M.Com MS(Finance) (inprogress) Email : [email_address] Cell : 0092-321-9091220
  • Two concepts of Working Capital
    • Gross Working Capital
        • Gross working capital is the total of all current assets
    • Net Working Capital
        • Net working capital is the excess of current asset over current liabilities.
  • Working Capital Management
    • To be very simple, Working Capital Management is the management of current assets and current liabilities
  • Points to be consider by working capital manager.
    • Characteristic of current assets
    • Factors influencing working capital requirements
    • Formulation of working capital policy
    • Control of working capital.
  • Characteristics of current Assets
    • Short life span.
    • Swift transformation into other asset form
  • Factors influencing W.C.M
    • Nature of Business
    • Seasonality of operations
    • Production policy
    • Market condition
    • Condition of supply
  • Formulation of Working Capital
    • What should be the Ratio of current assets to sale?
    • What should be the ratio of short-term financing to long term financing
      • Aggressive approach
        • Increase Risk (investment & utilize of liquid assets)
      • Conservative approach
        • High Ratio of current asset.
    Two Approaches for Above questions
  • Control of Working Capital
    • Control operating cycle of Business.
      • Raw material and stores storage stage.
      • Working in Progress Inventory stage
      • Finished goods inventory stage.
      • Debtor collection stage.
  • Thanks for the Attention
    • The End