QUESTION $3(25$ MARKS$)$

Effective working capital management is crucial for a company's financial health and

operational success. A key indicator of proficient business management is the ability

to use working capital strategically to maintain a strong balance between growth,

profitability, and liquidity.

$($a$)$ Identify and explain TWO $(2)$ internal determinants of working capital.

$(4$ MARKS$)$

$($b$)$ Discuss how a firm can balance the trade$-$off between profitability and liquidity.

$(5$ MARKS$)$

$($c$)$ Identify and explain TWO $(2)$ principles of self$-$liquidating debt with example.

$(6$ MARKS$)$

$($d$)$ Discuss FIVE $(5)$ ways how a firm can reduce Operating Cycle $($OC$).$

$(10$ MARKS$)$