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Financial Management - WORKING CAPITAL MANAGEMENT

Introduction of WORKING CAPITAL MANAGEMENT

   Posted On :  21.06.2018 09:53 pm

Effective financial management is concerned with the efficient use of important economic resources, namely, capital funds.

Introduction
 
Effective financial management is concerned with the efficient use of important economic resources, namely, capital funds. The capital funds can be used to invest in two forms like,

1.Fixed Assets

 
A major portion of the capital funds used for investing in purchase of fixed assets for permanent or long-term purposes, for the purpose of diversification, expansion of business, renovation or modernization of plant and machinery and research and development and
 

2.Current Assets

 
Rest of the portion of funds needed for short-term purposes like investing into assets for current operations of business is called working capital. For example, one who is managing a trading business has to arrange funds regularly for, purchase of finished stock and keeping it in storeroom, and also find suitable customer to go for sales. On the other hand if it is a manufacturing firm he has to arrange for funds continuously for, buying raw materials, keeping it for some time in store, then taking it for the process of converting into finished goods, and ultimately selling it to consumers. 
Tags : Financial Management - WORKING CAPITAL MANAGEMENT
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