Literature Review on Working Capital Management - Essay Example

Only on StudentShare

Extract of sample
Literature Review on Working Capital Management

This review is composed of only those studies which have been published and made available through books, journals, magazines and internet.
There is no doubt that working capital management is an indispensible part of everyday financial management of a firm. It is commonly understood that working capital requirement is related with the day to day operations of a firm and if the firm finds shortage of working capital, the firm is likely to face liquidity problem, which in turn affect the credit worthiness and the business as a whole. On the other hand, if the working capital position is too high, it does not sound good. Rather, it is a problem of lack of proper management. In other words, too much of working capital will affect the profitability by unnecessarily blocking funds in the current assets. Therefore, finding a proper balance between shortage and excess working capital is the key element of working capital management. The firm's liquidity and profitability are judged in terms of the working capital position of the firm. Jin Mcmenamin, in his famous book 'Financial Management: An Introduction', remarks that working capital is an important measure of liquidity and volume of working capital determines the risk level. The more the working capital, less is the chance of a firm's bills are not met for payment (Mcmenamin, 1999). ...Show more

Summary

The subject of working capital is one of the decision areas of every financial manager irrespective of the type, size and nature of his firm. A firm's working capital management involves management of the current assets, current liabilities and the inter relationship between the various components of the two…
Author : moenmittie
Save Your Time for More Important Things
Let us write a custom essay on your topic
"Literature Review on Working Capital Management"
with a personal 20% discount.
Find out more

Related Essays

Working Capital Management Analysis
"Working capital management involves management and control of the gross current assets as against the net working capital. The current assets mainly comprise of cash, account receivables, bills receivables and inventories."1 When integrated with cash flow, the management of working capital in very important in running a business.
3 pages (750 words) Essay
Working Capital Management
Second, the large holding of current assets, especially cash, strengths the liquidity position but also reduces overall profitability. Third, levels of fixed and current assets depend upon the expected sales, but it is only current assets which can be adjusted with sales fluctuations in the short run therefore company has greater flexibility in managing current assets.
4 pages (1000 words) Essay
Waste Management Literature Review
US comprise just 4% of the global population, but churns out almost 30% of the waste generated by OECD nations (Heather, 2005). Through an elaborate public relations campaign the organizations generated a popular narrative about garbage/waste that shifted responsibility from industry to the individual.
10 pages (2500 words) Essay
Working capital management - a business organizations success
While holding ample amount of working capital is suitable in order to prevent the risk of illiquidity holding too much also hinders the business organization in undertaking profitable investments. Thus, the business arena has increasingly been putting emphasis on balancing working capital.
2 pages (500 words) Essay
Integrated Liberal Studies Global Cultures
In its draft, the United Nation's emphasis is on creating a just world, which will emphasize on eliminating most of the problems facing the world today. It sought to end poverty, fight hunger, achieve universal primary education, promote gender equality and empowerment of women, reduce child mortality, improve health care including improved maternal health, combating HIV/Aids, malaria and other diseases, and promote stable environment.
6 pages (1500 words) Essay
Knowledge Management literature review
The literature review focuses essentially on the aspects that are necessary for high quality field servicing which would in turn lead to higher levels of customer satisfaction having a direct spin-off on improved sales and marked improvement and referral sales within the organization.
8 pages (2000 words) Essay
You are writing the cover letter to your writing portfolio. This letter should introduce readers to the work in your portfolio and your development as a writer
I would like to continue to build on this knowledge and work to sharpen my skills in the areas that are more difficult for me. I can sometimes be too wordy in my overzealous attempt to convey a meaning. The economy of words
5 pages (1250 words) Essay
working capital management
Research philosophy describes the way I think about the development of knowledge which affects the way I go about doing research. There are three types of research philosophies: positivism, Interpretivism and realism. My research is based on mixtures of all these
12 pages (3000 words) Essay
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT