Working Capital Management

Working Capital Management

Simply, Working Capital Means management of Short-term asset of company which is held for less than one year.

We can Calculate Working Capital Management(WCM) by:

WCM= (Short-term asset - Short-term liability)

That indicate how better we can meet the short-term liability by short-term asset.
Notwithstanding an organization have to balance between liquidity and profitability that can be measured by working capital management.

Components of Working Capital Management are:

Assets:
Cash, Accounts receivable, Inventory

Liability:
Accounts Payable and Interest Payable etc.