PROGRAM NAME : BBA

Course : Financial Manageme

nt

Topic : Working Capital

Management
Group members
NAME REGESTER NO.
1. Harish N. 172002415
2. M.sadik 172002426
3. M.Shakir 172002421
4. Shanthi pinto 172002418
5. Sayana M S 172002443
6. Flavi Rodrigues 172002413
7. Hemalatha 172002416
8. Vijetha 172002451
9. Ashwitha 172002404
10. Jayalaxmi 172002418
11. Geetha A 172002414
12. Isthafa 172002427
13. Divya 172002412
WORKING CAPITAL
MANAGEMENT
 CONTENTS
• Nature of Working capital
• Concepts of working capital
• Kinds of working capital
• Operating cycle
• Determination of working capital
• Factors of working capital requirement
• Types of WC finances
• Factoring in India
• Tondon committee report
• Chore committee
NATURE OT WORKING CAPITAL
• The goal of working capital management is to mana
ge the firm's current assets and liabilities in such a
way that a satisfactory level of working capital is ma
intained.
• The interaction between current asset and current l
iabilities is, therefore , the main theme of the theor
y of working management.
CONCEPTS OF WORKING CAPITAL

a. Gross working capital

b. Net working capital
 KINDS OF WORKING CAPITAL
a. Permanent or Fixed Working Capital
b. Variable or Seasonal Working Capital
NEEDS FOR WORKING CAPITAL
Operating cycle
DETERMINATION OF WORKING CA
PITAL
1. General nature of business
2. Production cycle
3. Business cycle
4. Production policy
5. Credit policy
6. Growth and expansion
7. Vagaries in the availability of Raw material
8. Profit level
9. Level of Taxes
10. Dividend policy
11. Depreciation policy
12. Price level policy
13. Operating efficiency
FACTORS OF WORKING CAPITAL/
APPROACHES OF WORKING CAPIT
AL

a. Hedging approach or Matching approach

b. Conservative approach
c. Aggressive approach
 TYPES OF FINANCE
1. Short -term finance
Source s of short term finance
a. Trade credit
b. Bank credit
c. Tactoring
FORMS OF TRADE CREDIT

a. Open account credit

b. Account backed by Bill of Exchange
c. Account backed by promissory note.
MERITS OF TRADE CREDIT
1. Automatic availability
2. Lack of formalities
3. Cash discount
4. Standard terms
5. Interest free finance
DEMERITS OF TRADE CREDIT

1. Higher price
2. Limited availability
3. Restricted amount
4. Sellers in convenience
BANK CREDIT MANAGEMENT
Forms of bank credit
a. Direct loans
b. Overdraft facility
c. Cash credit facility
d. Discounting of B.O.E
MERITS OF BANK CREDIT
1. Universal access
2. Various forms of credit
3. Flexibility in operations
4. Combining multiple function
IMPORTANCE
1. Strict rules
2. Security bias
3. High rate of interest
4. Monitory policy of RBI
FACTORING
Service rendered by a factor are given below
1. Management of sales ledger
2. Collection of book debts
3. Debtors evaluation and credit information
4. Credit protection
5. Advisory services
6. Financing
TYPES
1. Maturity factoring
2. Invoice discounting
3. Advance factoring
4. Resource factoring
5. Underclosed factoring
6. Full factoring
FACTORING IN INDIA
TONDON COMMITTEE REPORT
CHORE COMMITEE