What Is Working Capital in Financial Management?

What Is Working Capital Management in Financial Management?

What Is the Importance of Working Capital in Financial Management?

How to Calculate Working Capital?

Which Factors Affect Working Capital Management?

FAQs About Working Capital in Financial Management

What are the strategies of working capital management?

In general, there are three different strategies of working capital management which are aggressive, hedging, and conservative. The application among these three approaches is chosen as per risk and profitability.

What are the functions of working capital management in financial management?

The essential functions of working capital management are liquidity management, inventory management, accounts receivable management, accounts payable management, short-term debt management.

What are the types of working capital other than gross and net working capital?


Apart from gross and net working capital, working capital is classified into some other types as well. It includes:

  • Temporary Working Capital
  • Permanent Working Capital
  • Reserve Working Capital
  • Regular Working Capital
  • Seasonal Working Capital
  • Special Working Capital
  • Negative Working Capital

What are the varieties of capital structure?

Capital structure is classified into four different types that comprise debt capital, equity capital, financial leverage, and optimum capital structure.