Definition of ''Working Capital Management''
A managerial accounting strategy that is focusing on maintaining efficient levels of both components of current liabilities, working capital, and current assets, in respect to each other. Working capital management makes sure a company has enough cash flow in order to meet its short-term debt obligations and operating expenses.
Working Capital Management considers to the execution, planning, and control of investment in and financing of working capital. Working capital management is regarded along with the problems which arise in attempting to manage the current assets, the current liabilities and the inter-relationships that exist among them. The basic ingredients of the theory of working capital management may be said to involve its definition, require optimum level of current assets, the trade-off among the risk and profitability related with a firm''s level of current assets and current liabilities, financing-mix policies and so on.