Paper Contents
Abstract
All business, small, medium, or large, requires finance to operate and achieve its goals. Finance, in fact, is so crucial today that it is aptly referred to as an enterprise's lifeblood. No business can reasonably achieve its goals without adequate finance. Working capital analysis depends on tools such as Ratio Analysis and Statement of Changes in Working Capital. So far as working capital management is concerned, the firm has two major issues: First, given the level of sales and corresponding cost factors, what are the optimal levels of cash, accounts receivable, and inventories that a firm should maintain? Second, given these optimal levels, what is the most cost-efficient method of financing these working capital investments? To get the best out of it, firms should have no idle assets and finance with the minimum possible sources of funds. Why? Typically, investment in short-term assets and financing short-term liabilities is beneficial to the firm in considerable extent.
Copyright
Copyright © 2025 D. VAISHNAVI. This is an open access article distributed under the Creative Commons Attribution License.
