WELCOME TO MY

PRESENTATION
 PRESENTATION TOPIC ON:-
• CHAPTER ONE:- WORKING CAPITAL MANAGEMENT
• CHAPTER TEN:- AGGREGATE LIQUIDITY
 WORKING CAPITAL
MANAGEMENT
• MEANING OF WORKING CAPITAL 
• WC = CA – CL
 DIFFERENT APPROACHES TO
WORKING CAPITAL MANAGEMENT
• Three Approaches
• traditional or conservative approach

• Matching approach
• Aggressive” working capital management
 IMPORTANCE OF WORKING
CAPITAL MANAGEMENT
• Getting right raw material supplied in right time,
• Wages & utility bills are properly cleared,
• Customers are smoothly getting their demanded goods & services regularly
 WORKING CAPITAL
MANAGEMENT IN MODERN
WORLD
• Two of the most important developments in modern financial world are:
• (i) The relatively higher cost of investment along with wider opportunities for financing mix
• (ii) the appearance of deregulated money market.
 SITUATIONS LEADING TO NEGATIVE
WORKING CAPITAL BALANCE
• Significant depletion of major current assets for writing off of significant volume of obsolete
inventory held for long time
 AGGREGATE LIQUIDITY
• The firm’s Level of Aggregate Liquidity
 TRADITIONAL MEASUREMENT OF
LIQUIDITY
• Current ratio: CR= CA/CL
• Quick or Acid Test Ratio: QR= (CA-Inventory – prepaid exp)/ CL
• Accounts Receivables Turnover (ART): Credit Sales divided by Average A/c/Rec.
• Average Collection Period (ACP/ DSO): ACP is found by multiplying the number of days in
a year (360 days) by the inverse of Accounts Receivable Turnover (ART).
• Inventory Turnover Ratio (ITR):
• Creditors Turnover Ratio:
 IMPROVEDE INDICATE FOR
MEASURING AGGREGATE LIQUIDITY
• CASH CONVERSION CYCLE (ccc)
• Comprehensive liquidity index (CLI)
• Net liquid balance (nlb)
• The lambda index
CONCLUSION 
THANKS TO ALL