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Methods and concepts for Value Based Management (VBM)

Steps Ahead ... Working Capital Management

Working capital, also known as net working capital, is a financial metric which represents operating liquidity available to a business. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. It is calculated as current assets minus current liabilities. If current assets are less than current liabilities, an entity has a working capital deficiency, also called a working capital deficit. Decisions relating to working capital and short term financing are referred to as "working capital management". These involve managing the relationship between a firm's short-term assets and its short-term liabilities. The goal of working capital management is to ensure that the firm is able to continue its operations and that it has sufficient cash flow to satisfy both maturing short-term debt and upcoming operational expenses.

Management of working capital is devided into:

Please refer to: "Steps Ahead Cash Management" and "Steps Ahead Stock Reduction Management" for further details.