Working capital management is the complex of methods used by the company to assure its activity further regulating the financing and investments into its work. The working capital is the major source of financing of every business, because the investors provide the firm with money and enable it work further and produce its goods and services. Working capital management is supposed to regulate the capital of the company and make sure it can work further. Every firm has its expenditures and profit and in order to keep the situation under control and protect the company from bankrupting working capital is used. It is the working capital, which covers all the short-term debts of the company and continues its further work. There are several aims or points which are associated with working capital management. First of all it manages the cash of the firm, so that it covers all the expenses of the company allowing it to work stably without any delay. Then, it helps the firm with its inventory management.
For example, with the help of this capital, the equipment is kept in the right working condition; the firm is provided with the materials and resources used for the production, so the supply chain is also financed in this way. The working capital management helps to cope with the debtors and pay credits, which enable the company work permanently and it is evident that the credit is to be paid on time. Finally, the working capital plays the role of shirt-term financing. If the firm requires extra money at the very moment, it uses the working capital for its needs.
Working capital management is the essential part of the firm’s capital which assures its work. In order to succeed in term paper writing, the student is asked to learn about the working capital and its management and explain the relevance and value of the topic. One should pay attention to the aspects of working capital management and its major tasks. The student will need to research the purpose of working capital, its role for business and observe a few cases which would prove its importance and effectiveness. Of course, one should observe a few theories which explain the meaning of working capital management and compare them.
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