Working Capital Management

Contents
• Gross and net working capital
• Components of working capital
• Objectives of working capital management
• Operating cycle and turn over
• Factors influencing working capital including working capital policy of the business enterprise
• Estimation of working capital and sources of working capital
• Brief visit to recommendations of various committees affecting working capital resources from banks
• Cash management
• Inventory management
• Receivables management
• Numerical exercises on:
Estimation of working capital
Cash flow statements
EOQ model and
Receivables management

At the end of the chapter the student will be able to:
• Calculate operating cycle in days and value
• Estimate the different components of current assets and arrive at required working capital assistance from external sources
• Prepare cash flow statement after understanding the difference between cash budgeting and cash flow statement
• Apply Inventory control techniques like EOQ, ABC analysis, movement analysis to materials
• Appreciate that control of work in process is a technical subject and control of finished goods is a factor of stocking policy and the nature of industry
• Calculate the inventory carrying costs and receivable carrying costs and
• Map the process of bills discounted with banks and compare bills discounted with factoring of receivables

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