Financial Management: Core Concepts, Third Edition

Chapter 13 Working Capital Management

AT a Glance

1. LO1 Model the cash conversion cycle and explain its components.

   Working capital management is a strategy that focuses on maintaining efficient levels of both current assets and current liabilities so that a company has greater cash inflow than outflow. The cash conversion cycle illustrates how long a company must finance its production and accounts receivables as part of the operations of the business. It is reduced by how long the company takes to pay its suppliers.

   

   Figure 13.1

2. LO2 Understand ...