Working Capital Policy – Relaxed, Restricted and Moderate
The working capital policy of a company refers to the level of investment in current assets for attaining their targeted sales. It can be… Read Article
A Comparison between 3 Strategies of Working Capital Financing
There are three strategies or approaches or methods of working capital financing – Maturity Matching (Hedging), Conservative and Aggressive. The hedging approach is an… Read Article
Working Capital Estimation – Operating Cycle Method
What does Operating Cycle Method do?Operating cycle method for estimating working capital is based on the duration of the operating cycle. The longer the… Read Article
Working Capital Calculation – Regression Analysis Method
Regression analysis is a statistical tool to estimate the working capital and its components. It establishes an equation relationship between revenue and working capital.… Read Article
Working Capital Calculation – Percentage of Sales Method
The percentage of sales method is a working capital forecasting method based on the past relationship between sales and working capital. Like technical analysis… Read Article
Methods for Estimating Working Capital Requirement
There are broadly three methods of estimating or analyzing the requirement of working capital of a company, viz. percentage of revenue or sales, regression… Read Article
Aggressive Approach to Working Capital Financing
The aggressive approach is a high-risk strategy of working capital financing wherein short-term finances are utilized to finance the temporary working capital and a… Read Article
Conservative Approach to Working Capital Financing
The Conservative approach is a risk-free strategy of working capital financing. A company adopting this strategy maintains a higher level of current assets and,… Read Article
Maturity Matching or Hedging Approach to Working Capital Financing
What is Maturity Matching / Hedging Approach?Maturity matching or hedging approach is a strategy of working capital financing wherein we finance short-term requirements with… Read Article
Working Capital Management Strategies / Approaches
There are broadly 3 working capital management strategies/ approaches to choosing the mix of long and short-term funds for financing the net working capital… Read Article
Operating and Cash Operating Cycle
Operating CycleOperating cycle and cash operating cycle are used interchangeably, but it’s a misconception. They are different by a small margin, but that makes… Read Article