Working capital in common parlance is the difference between current assets and current liabilities. Current assets usually consist of cash, marketable securities, receivables, and inventory. A major component of current liabilities, on the other hand, is the payables. Management of working capital refers to the practices and techniques designed to control all the items of current assets and current liabilities. In the ordinary sense, working capital management is the function that involves effective and efficient use of all the components of current assets and current liabilities in order to minimize total cost.

1. Prepare a report working capital policy. Include the following information:

a) Discuss the three main policies governing working capital

b) Discuss in detail the 4 main components of working capital management

c) Select 2 listed companies in Malaysia and with the use of the formula, advise the financial director on how best to implement the policy of working capital. In your discussion, detail the merits and demerits of working capital as well as how the current status quo will influence the returns on the company.

Instruction:

- The assignment should have a minimum of 4000 words.

- Use at least 10 related articles for your literature review (2018 upwards only)

- Provide a summary table for article references in APPENDIX