Decisions relating to working capital and short term financing assignment help are referred to as working capital management assignment help. These involve managing the relationship between a firm's short-term assets and its short-term liabilities. The goal of working capital management assignment help is to ensure that the firm is able to continue its operations and that it has sufficient cash flow to satisfy both maturing short-term debt and upcoming operational expenses.
Decision criteria
By definition, working capital management assignment help entails short term decisions - generally, relating to the next one year period - which is "reversible". These decisions are therefore not taken on the same basis as Capital Investment Decisions assignment help (NPV or related, as above) rather they will be based on cash flows and | or profitability.
One measure of cash flow is provided by the cash conversion cycle - the net number of days from the outlay of cash for raw material to receiving payment from the customer. As a management assignment help tool, this metric makes explicit the inter-relatedness of decisions relating to inventories, accounts receivable and payable, and cash. Because this number effectively corresponds to the time that the firm's cash is tied up in operations and unavailable for other activities, management assignment help generally aims at a low net count.
In this context, the most useful measure of profitability is Return on capital (ROC). The result is shown as a percentage, determined by dividing relevant income for the 12 months by capital employed; Return on equity (ROE) shows this result for the firm's shareholders. Firm value is enhanced when, and if, the return on capital, which results from working capital management assignment help exceeds the cost of capital, which results from capital investment decisions as above. ROC measures are therefore useful as a management assignment help tool, in that they link short-term policy with long-term decision making. See Economic value added (EVA).
Management of working capital
Guided by the above criteria, management will use a combination of policies and techniques for the management of working capital assignment help. These policies aim at managing the current assets (generally cash and cash equivalents, inventories and debtors) and the short term financing, such that cash flows and returns are acceptable.
Cash management- Identify the cash balance which allows for the business to meet day to day expenses, but reduces cash holding costs.
Inventory management- Identify the level of inventory which allows for uninterrupted production but reduces the investment in raw materials - and minimizes reordering costs - and hence increases cash flow. Besides this, the lead times in production should be lowered to reduce Work in Progress (WIP) and similarly, the Finished Goods should be kept on as low level as possible to avoid over production; Just In Time (JIT); Economic order quantity (EOQ); Economic quantity
Debtors management assignment help- Identify the appropriate credit policy, i.e. credit terms which will attract customers, such that any impact on cash flows and the cash conversion cycle will be offset by increased revenue and hence Return on Capital (or vice versa); see Discounts and allowances.
Short term financing- Identify the appropriate source of financing, given the cash conversion cycle: the inventory is ideally financed by credit granted by the supplier; however, it may be necessary to utilize a bank loan (or overdraft), or to "convert debtors to cash" through "factoring".

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