Before understanding Working Capital Management, it’s important for us to know what working capital is. Working capital means how much liquid asset any company has to build its business. Working Capital could be positive or negative depending on the debts company has. If company has more of the working capital that means they are in positive stage. That means they will be more successful as they can improve their operations and can expand themselves. However, if company has less working capital or they are more into debts then they lie in a negative stage.
Now the question arises what working capital management is? With above discussion it has become very easy to understand that Working Capital Management is managing the working capital. That means managing the current assets and current liabilities. So this makes very clear that working capital management help firms to ensure its continued operations along with sufficient cash flow to satisfy maturing short term debts and current operational expenses.
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