Working capital management is concerned with the problem that arises in attempting to manage

Jun 17th, 2015
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Current assets refer to those assets, which in the ordinary course of business can be or will be turned into cash within one year.

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INTRODUCTION Working capital management is concerned with the problem that arises in attempting to manage the current assets, the current liabilities and the interrelationship that arises between them. Current assets refer to those assets, which in the ordinary course of business can be or will be turned into cash within one year. The major current assets are cash, marketable securities, accounts receivables and inventory. Current liabilities are those liabilities which are intended, at their inception, to be paid in the ordinary course of business, with in a year. The basic current liabilities are accounts payable, bills payable, Bank Overdraft and Outstanding expenses.The goal of working capital management is to manage the firms Current Assets and Current Liabilities in such a way that a satisfactory level of working capital is maintained.Working capital ensures normal and smooth working of a business unit. It is required for the raw materials and stores, payments of wages and other regular expenses like electricity, water charges, taxes etc. working capital is necessary when regular manufacturing activities are under taken and normal production activities are conducted. Such capital is required for a short period as it is recovered from the customers when the products are sold to them. Therefore, interaction between Current Assets and Current Liabilities are the main theme of working capital management. Profits are earned with the help of assets, which are p

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