CAPITAL MANAGEMENT

WORKING CAPITAL MANAGEMENT

The financial management of business firms involves three functions:

the management of long term assets,the management of long-term capital,and the management of short term assets and liabilities. The first of these is capital budgeting, the second one is the management of capital structure, and the last is working capital management. The management of working capital is concerned with the management of assets and liabilities in the top half of the balance sheet. Included here are assets such as cash, marketable securities, accounts receivable, inventory prepaid expenses, and other current assets; also, liabilities such as accounts payable, wages payable, accruals. 

We will analyze decisions in any finance text, the author must make a decision regarding what should be presented. Specially, should the text concentrate on the current financial practices and procedures of existing firm or should it present the best that finance has to offer.

In this text, while some methods currently available. In this sense, the text is perspective: it recommends the most advantageous ways of addressing the problems of working capital management.