Hira Aziz

How to manage working capital

published9 months ago
1 min read

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The last week was very busy for me because of my sister-in-law’s wedding. That is why I am writing a short Accounting Guide for this week (does not includes practice questions and solutions).

You know what is working capital, how to calculate and analyze it. But do you know everything about working capital that an accountant needs to know? The duties of an accountant are evolving day by day. Today, an accountant should not only know how to calculate and analyze working capital, but he/she should be able to propose solutions for covering the shortage of working capital. This is called working capital management.

This week’s “Accounting Guide” is about working capital management

Concept description

What is working capital management

Working capital management is a technique that help businesses to make the most of available current assets and ensure the flow of cash for offsetting the current liabilities and operating expenses.

The main purpose of working capital management is to optimize the operational ability of the company. The efficient management of working capital helps in running the day-to-day operating activities of a firm smoothly.

There are many different ways to manage the working capital. I have written a complete blog post about the working capital strategies. Click below and have a look at the various strategies of working capital management.

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Hira from Accounting Drive

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