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Working capital management:
Working capital also called as net current assets or current capital measures how much in liquid assets, a company has available to build its business.
If we deduct current liabilities from current assets we get the working capital. Depending upon how much debt the business is carrying working capital can be positive or negative. In general business having a lot of working capital will be doing good since they expand and improve their day to day operations. Companies with negative working capital may lack the fund which is required for growth.
Working capital is also known as the cash available for running everyday operations of the business to buy assets or to pay for the obligations. Sufficient working capital allows organization to avail of unexpected opportunities and to qualify for bank loans and favourable trade credit.
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