1. The meaning(s) of the terms net working capital and working capital requirements and what investing in working capital means for the operation, profitability and growth of the company

2. Is working capital an indicator of your company’s liquidity? Is working capital a use or a source fund?

3. How different components of the operating cycle can be influenced to better manage working capital.

4. Working capital is viewed by some companies simply as cost, and as a result, the company management tends to react to a “cash squeeze” by slashing working capital expenditure. At the other end, there is also a tendency to invest too much in working capital to maximize short-term profit. What is the appropriate level of working capital for maximizing the value of the company?

5. How efficient management of working capital (shown as a short-term investment) for the company’s long-term growth by approaching working capital management as a lever for freeing up cash from inventory, accounts receivable and accounts payable

6. Is there an integrated and value-creating approach to working capital management in which all elements of tied-up capital across the balance sheet (fixed assets, inventories, receivables, payables, and cash) have to be considered as a whole?

7. In this context, excess inventory is one of the most overlooked sources of cash, some evidence suggests that better inventory management can potentially account for almost half of the savings from a working capital optimization process. This process requires the applications of enhanced forecast accuracy and demand planning, advanced delivery and logistics concepts and optimized production processes to reduce work-in-progress inventory.

8. A number of well-known companies have in recent years introduced very important, sometimes pioneering, innovations in working capital management with striking results. What are some of these best-case practices?

Answer rating: 100% (QA)

Net working Capital The difference between companys short term assets and liabilities is called Net working capital The current assets and current liabilities are netted of in order to arrive at the N... View the full answer