Working capital management is a process or set of activities
that are performanced by the organizations to ensure the day to day
operations of the company. It involves checling for the current
assets and the liabilities so as to ascertain the cash availability
to meet day to day business expenses.
The first major goal of the firm is to maximize the
profit - revenues should exceed the expenses to the
maximum extent possible keeping in mind the customers value and
shareholders investment. The second major goal is Long term
survival- the firm should plan strategically in such a way
that they can stay in the market for longer term.
The first function is to ensure liquidity in the system so that
the economic activity runs smoothly. The second function is savings
and payments function.