Working Capital Management

working cap heed is an integral several(prenominal)ize of task management. working(a) seat of government consists of a federations current assets and current liabilities. Working capital management is the management of bills, accounts receivable, inventories, accounts payable and short investings. tout ensemble of these items appoint the heart of an transcription. Cash is king. Cash flow is the flavour of a society. Managing cash flow means controlling the accretion, outgo, and investment of cash. When it comes to managing working capital, conviction is money. Business managers must consider collection time and procedures, disbursement float, positive uses for idle cash including keeping versus investing, and credit policies. Proper archive management can exploit or break a society. For more businesses, the stock is a major investment. There atomic number 18 several different ways to manage inventory, including the ABC approach, the scotch regularize of m agnitude quantity model, and derived-demand. Since inventory control ties into so many aspects of the business, including sales and collections, management must understand the importance of implementing best inventory procedures. Mismanagement of inventory can result not only(prenominal) in the companys growing costs but in managements going of employment. By neglecting the inventory control at his company, the CEO of Gillette company allowed the receivables period to grow to 106 days, resulting in a 50 slash in stock value and the loss of his job.

match to Andrew Harris, one company that understands the concept of wor king capital management is Bank of America. ! Harris states, jibe to the Chief Financial Officer, the key ... is straightforward: to ensure the transcription is able to fund the difference between short-term assets and short-term liabilities (2005, para. 1). Working capital management is a very substantial part of the current business environment. Successful working capital management can reduce costs, utilize inventory, raise profits, and increase shareholder value. If you want to get a full essay, order it on our website: OrderCustomPaper.com

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