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The aim of the course Working Capital Management is to equip students with the knowledge and skills to manage a company’s short-term assets and liabilities efficiently. Students will learn techniques to assess, forecast, and optimize working capital while reducing financing costs. The course aims to provide practical insights into the strategies for inventory, credit, and cash management to ensure that a company has sufficient liquidity to meet its short-term obligations.

After the successful completion of this course, you will understand the following;

Exploring the Concept of Working Capital Management:

• Define the concept of working capital and explain its significance in a business context.
• Classify working capital and identify its different components, including cash, inventory, accounts receivable, and accounts payable.
• Describe the working capital cycle and its various stages.
• Analyze the factors that affect the composition of working capital, such as business size, industry, and operating cycle.
• Differentiate between static and dynamic views of working capital, and explain their implications for effective management.
• Identify the determinants of working capital and explain how they impact a company’s financial performance.

Understanding the Working Capital Investment Policies:

• Understand the different types of Working Capital Investment Policies including Conservative, Aggressive, Highly Aggressive, and Hedging policies
• Understand the different sources of Working Capital Finance including Spontaneous and Negotiated Sources.
• Understand the time and money concept in Working Capital Management.
• Understand the need for Working Capital and its importance in the success of a business.
• Estimation of Amount of Different Components of Current Assets and Current Liabilities:
• Learn how to estimate the number of different components of Current Assets and Current Liabilities in order to manage Working Capital effectively.

Optimizing Business Operations:

• Understanding the different aspects of Cash Management.
• Identifying the motives for Holding Cash and Marketable Securities.
• Determining the factors that impact the Optimum Cash Balance.
• Defining the objectives of trade credit.
• Evaluating the different Credit policies.
• Analyzing the various dimensions of receivable management.
• Developing strategies for effective collections from receivables.
• Understanding the different Techniques of inventory management.
• Evaluating the different Methods of inventory valuation.

Assessment of Working Capital and Lending Methods:

• Understand different methods of assessing working capital, such as operating cycle, percentage of sales, regression analysis, cash forecasting, and balance sheet methods.
• Gain knowledge about various methods of lending, including Tandon’s First and Second methods and the cash budget method.