Management of working capital, Financial Management

Assignment Help:

Q. Management of Working Capital?

Working capital, in general practice, refers to the excess of current assets over current liabilities. Management of working capital therefore, is concerned with the problems that arise in attempting to manage the current assets, the current liabilities and the inter-relationship' that exists between them. In order words it refers to all aspects of administration of both current assets and current liabilities.

The basic goal of working capital management is to manage the current assets and current liabilities of a firm in such a way that a satisfactory level of working capital is maintained, Le., it is neither inadequate nor excessive. This is so because both inadequate as well as excessive working capital positions are bad for any business. Inadequacy of working capital may lead the firm. to insolvency and excessive working capital implies idle funds which earn no profits for the business.


Related Discussions:- Management of working capital

International bonds, International bonds are divided into two c...

International bonds are divided into two categories namely, foreign bonds and euro bonds. Foreign bonds are issued by a borrowing company in another

Objective of wealth maximization, Q. The main rationale for the objective o...

Q. The main rationale for the objective of wealth maximization is that it shows the most efficient use of the society's economic resources and therefore leads to a maximization of

Explain the pricing spill over effect, Explain the pricing spill-over effec...

Explain the pricing spill-over effect. Suppose a firm operating in a segmented capital market (such as China, for example) decides to cross-list its stock in New York or London.

Distinguish between a promissory note and a bill of exchange, QUESTION ...

QUESTION (a) "A promissory note is an instrument in writing (not being a blank or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certai

What are the difficulties of capital budgeting, Q. What are the Difficultie...

Q. What are the Difficulties of Capital Budgeting? 1. Measurement Problems: - Identifying as well as measuring the costs and benefits of a capital expenditure proposals tend to

List the main features of ordinary shares, Question 1 Describe the types o...

Question 1 Describe the types of investment decisions Question 2 List the main features of ordinary shares Question 3 List the assumptions of Walter's dividend model. Ex

Define cash management, Cash Management: - Cash management comprises mainta...

Cash Management: - Cash management comprises maintaining optimum cash balance and efficient collection and disbursement of cash. Methods or else Devices of Cash Management: - Th

Graphical depiction using duration to estimate price changes, The price vol...

The price volatility properties of bonds with the help of the graph of the price/yield relationship. Let us now, with the help of a graph, illustrate how duration estim

Advantages to the investors, Advantages to the Investors: The warran...

Advantages to the Investors: The warrant acts as a sweetener and ensures a better subscription to the NCDs, especially for companies with good track record. NCDs with warran

Alternative dividend policies, The managing directors of three profitable l...

The managing directors of three profitable listed companies discussed their companies'' dividend policies at a business lunch. Company A; has deliberately paid no dividends for th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd