Essentials of Working Capital Management

Front

Definition

Back

Managing short-term assets and liabilities

Front

Objective

Back

Ensure liquidity and operational efficiency

Front

Components

Back

Cash, inventory, receivables, payables

Front

Cash Management

Back

Optimize cash flow and liquidity

Front

Inventory Management

Back

Balance stock levels and costs

Front

Receivables Management

Back

Efficient collection of credit sales

Front

Payables Management

Back

Timely payment to suppliers

Front

Working Capital Cycle

Back

Time to convert resources to cash

Front

Liquidity

Back

Ability to meet short-term obligations

Front

Current Ratio

Back

Current assets divided by current liabilities