Working Capital Management

Working Capital Management involves the strategic handling of a company’s short-term assets and liabilities to ensure it maintains sufficient liquidity to meet its operational expenses while optimizing profitability. This process balances the inflow and outflow of cash, inventory levels, and payables and receivables cycles.

The primary objectives of working capital management include:

• Maintaining cash flow stability.

• Optimizing inventory turnover.

• Managing credit terms and collections.

• Avoiding liquidity crises or excessive idle cash.

Effective working capital management improves a company’s operational efficiency, enhances profitability, and reduces financial risk.