Wellson Ltd. has current assets, including cash, accounts receivable, and inventory, and current liabilities, including accounts payable and short-term notes payable. Wellson manages its working capital by focusing on management of current assets. Wellson has effective systems in place for granting credit to customers, collecting overdue
accounts, and managing inventory.

(a) Discuss why management of working capital is important for effective business operations.
(b) Discuss how Wellson can improve its management of working capital.