What is working capital management?

It refers to that part of total capital which is used for carrying out the routine or regular business operations. It is the amount required for financing day to day operations of the organisation.

Types of working capital.

1.Classification on the basis of the components of working capital: a. Gross working capital/circulating working capital/operating capital/current working capital; Total of all current assets. Current assets: cash in hand Cash at bank Bills receivable Sundry debtors. Closing stock- finished goods Work in progress Raw material. Prepaid expenses. Outstanding incomes

Net working capital

Net current assets=Current assets Less;current liabities

Working capital deficit;

Excess of current liabilities over current assets
Negative working capital= Current liabilities Less: Current assets

2.On the basis of the period for which it is required or on the basis of variability;
a.Permanent working capital b.Temporary working capital