Course

Unit 1

Introduction Working Capital Meaning –definition – Concept of Working Capital – Balance Sheet Concept – Operating Cycle Concept – Importance of – components of working capital – Factors Influencing working capital requirements – working capital life cycle – Role of finance manager in working capital.

Unit 2

Types of Working Capital – Gross Working Capital – Net Working Capital – Operating Cycle: Meaning of Operating Cycle, Significance of Operating Cycle – Cash Cycle: Meaning of Cash Cycle, Significance of Cash Cycle – Estimation of Working Capital Requirements – Determinants of Working Capital – Computation of Working Capital (Simple problems).

Unit 3

Sources of Working Capital – Commercial Banks: Forms of Bank Finance – Commercial Papers (CPs): Features – Factoring – Trade Credit: Advantages of Trade Credit – Accrued Expenses: Importance of Accrued Expenses – Deferred Income.

Unit 4

Cash Management – meaning – importance – Cash vs. Cash Flow – Motives for Holding Cash and Marketable Securities – Factors Determining the Optimum Cash Balance

Unit 5

Receivable Management – Dimensions of Receivable Management- Collections from Receivables – Inventory Management – Tools and Techniques of Inventory Management – ABC Approach- Value- volume Analysis – Classification: HML Classification, XYZ Classification, VED Classification, FSN Classification, SDF and GOLF Classifications, SOS Classification.

Course Objective:

To help the students to understand the concept of working capital management, components, and significance. They will acquire the knowledge and skills necessary to analyze and manage working capital effectively, assess working capital requirements, evaluate sources of working capital, implement cash management strategies, and optimize receivable and inventory management processes using various tools and techniques.

Course Outcomes:

The student will able to:

CO1: Understand the importance of working capital management in maintaining liquidity and financial stability in a business.

CO2: Recall the types of working capital and their definitions.

CO3: To understand the different sources of working capital to assess their suitability for specific business situations.

CO4: Analyze cash management strategies and their impact on business operations.

CO5: Explain the importance of efficient collections from receivables and effective inventory management.

Textbook:

1. Hrishikes Battacharya – Working Capital Management Strategies and Techniques – Prentice Hall of India

References:

1. Chitnis, M – Working Capital Management of Large Industrial Units – Dastane Ramachandra and company
2. Joshi N – Cash Management – New Age International Publishers