Profitability and Working Capital Management

Presented by : Amit Jamkhindikar

WORKING CAPITAL MANAGEMENT

Excess of current assets over current liabilities and provisions The Amount of funds necessary to cover the cost of operating the enterprise

Concepts of working capital

Balance sheet concept
Circular flow concept

Gross working capital

Net working capital

Gross operating cycle

Net operating cycle

Cash Conversion Cycle

CASH
Bills receivables Raw material

Work in progress

Debtors

Finished goods

Thus it is said
Working capital is to an organization as blood is to a Human Body

What is the ultimate Goal of the working capital management

 CAPACITY TO MAKE PROFIT

Factors
Conjunction between performance and productivity Liquidity Investment Expansion of business Flexibility Debt Recovery

Relation.
Accounts receivables Inventories Accounts payables

Handling correctly to an optimum level

PROFITABILITY

Correlation
Investment Strategic Purchase Research Uncertainty Continuous Credit Appraisal Policy Just In Time (JIT)

Thank you