explain the meaning of Working Capital Management describe the various dimension of working capital
Answers
working capital is the capital required to finance the short term or current assets such as cash, securities, debtors, stock. It refers to current assets – current liabilities. The aim of working capital management is to manage the current assets and current liabilities of the firm in a satisfactory manner.
Answer:
Working capital management is a business strategy designed to ensure that a company operates efficiently by monitoring and using its current assets and liabilities to their most effect use.
Explanation:
Dimension I: It is concerned with formulation of policies relating to risk, profitability and liquidity.
Dimension II: It is concerned with the decision about the composition and level of current assets.
Dimension III: It is concerned with the decision about the composition and level of current liabilities.