and _Fireneing Cumenf Asscte Apant {ham Te profitabi.bity sak trode tt, an thee important jnarediert of- the theony of working apt! maragenent + lcoowinta, beri ct eu anela, One of Be moot important deetaiana in how Clmenk anete coilh be france’. Three. types a [inanein deetrions Can be taken Dhre ne. Motehing Approach () ‘Conrervorhive Approath & Aagnemive A-ppevech - For thy , -hv0 AWC ea, pM cohich funda eon be pained .She important Aoviees ‘ef Long-foum financing art, threo clebenbae, aebh, preference Lhanen dra nofainedd canning. Short Foam renieoafrnanting refers. pounces inelude ahor}-Beam banke Loans , factoring recetvables ard public deb depomts. There a arsther source Urs name bo Sporsianen, financesny he moor Pountia op Arch finanein ane reede redid (Credits and bill payable) ang ouk Aton dling expences. A ism wooudh ike + [ronce up eur amnel, wilh . Apontareour Arup a much ao poarilole . Becwnse, Ub hwo ty eodth. We nll theupore , Concentrate. Owe attention on Yo Ahort-Rowm vs fora fox _ Hnaneednge :g Motehing on Hedging Appraach s A ceonking +4 reg appriach» Long. fuim financing cost be voed! te finance fixed amelin and permanent cuvent— amreda ant nhort-eoum pinoneing woth be wed sh france Tempo ran oe Seapebi- Variable curt ameks: However, "UF Ohouks be Reollined that exact matehing io not poarible, beeaure +f the uncechin @ A am - rane the Pee el fe Finan ung - Leng ma Finan erry : Time 4 har been Ahiwn on the above bau. Under makehing apprech sho ohort-foum tundo will be « Wwaed Y, the fem han & bredl eunert aneeta ned, ' anh no Temporary eaynent aroehs ; ‘ Conmerserbive pprorch ¢ Under ov camensative Plan the kisim’ finances tb _peamanent amek ank | a park of- Temporany ‘eumsntanreko with fora. form funda Th, in pyude when the firm ho"@ no temporary eugene andy vb aber Diapuihs by \nverbng aurplwe fondo jn mvnetable secwute The eonsewekive Plan rebica heavily on Rong torr bend and thashare 5 d> lm Riley Example “rm pel neste Finarerf ry, jn prancing “Up amito - In This policy, the firm : pirnceo a put oy tle peunanent ewnant> artte With Ahph Bue efireretey. Song extremly aggrenive fx may even ince a port op thein fixed arredn with dhakteon finanging he nelodtively mone woe ofp ohort-ftem financs o makeo firm more rloky . . eng uty \ Short foe Fieanciaa fAdeopacy H- Norling C apt ° The fem ohoul& maintain a, round coworking Copicteh Both eneemive an well aa inadequote t08King copit-ak ae Sargenous for the firm - Exeersive worlding capital means idfe firelo which earn no proba tor the firm, Paverty of working. copited not ony, impale (xm5 profitebi Didy but ag rewlhy jn production jnternuetona and ‘inefficiencies . he dander ot exeemive working aapite aac an follows } 4. yt neowlin Ip Unneceran aceuumuleshcny . jnventoniea “thus, the chaneer off jnvente.2¥ mishandling, warte onk, thet ark Lesser pAVieare at ban indlicobion ot defective enh} policy ang Alack colle her periecl . Consespe Maho inerdence fr bad debta aagulln ,whichy 3. Exeemve onlay capt “inakes maregenit complacent cwhich degenerates inte manogerest inofpeiency, .wow nerult, He fam frees Lght Creedkf. tirms. 4. Tendencies of ace IP nseumalodig Inventories +y make ppeewlodive pro ht gre. Vhin may Reni to moke civicbrd policy Libecek and difhentt to Cope with in fuhino when the fism hn unable do malee ppecudedive Popto | nodequate working eopitah to alin bad and hao th, foblecoing Changer + 4, 44 atognaten grouth. YF becomes difficalt for he fem ty underake prdpdnble pnjects fre nonavallabi 4, the working Capif-ah for. 2. Yee amen difheult +o imphemait operabirg plana and cchieve te firms putt target: 3. Operating In efficieneiea ereep in when i becomes de fhriewtt even to meet lay to- cosy commifmenty. 4. Fixed ame ane not efficient y ub Drerl bor the Qacle of, wosleing Capital funda. Dhuo, I pale chen on ek ang 5, Paucity Ar aorlang eopidah frola rendend the firm Pua + avaik ottnachve ‘tredit DpPpwralw5 & . ~ orn em Losses Yocses ih nepubation ahen TH hn nek te Sonathion dy hansen The aharktham ahlcaaHena «