Cash management is a broad term that refers to the collection, concentration and disbursement of cash. It encompasses a firm's level of liquidity, its management of cash balance and its short-term investment strategies. In some ways, managing cash flow is the most important job of a finance manager. If at any time, the firm fails to pay an obligation when [...]
After reading this essay you will learn about:- 1. Introduction to Working Capital 2. Operating Cycle Concept of Working Capital Computation 3. Working Capital Financing Approaches 4. Sources of Working Capital Finance 5. Management of Liquid Assets. Essay # 1. Introduction to Working Capital: Components of current assets are (i) Inventories, (it) Debtors and (m) Cash and Bank Balance. Components [...]
In this article we will discuss about the impact of overtrading, under capitalization on working capital. Impact of Overtrading on Working Capital: Overtrading arises when a business expands beyond the level of funds available. Overtrade means an attempt to finance a certain volume of production and sales with inadequate working capital. If the company does not have enough funds of [...]