Working Capital which is defined as all the short term assets used in daily operations. Net Working Capital may be defined as the difference between current assets and current liabilities. working capital management is the functional area of finance that covers all the current accounts of the firm. Working Capital comprises of two components: Permanent Working Capital Variable Working Capital Goals of Working Capital Policies Adequate Liquidity Minimization of Risk Contribute to Maximizing Firm's Value Factors affecting the Need for Working Capital Sales Volume Seasonal and Cyclical Factors Changes to Technology Policies of the firm Managing Working Capital It involves two processes: Forecasting Needed Funds Acquiring Funds Managing Working Capital requires the following actions: Monitoring Levels of Cash, Receivables and Inventory Knowing percentage of funds in Current Accounts Recording time spent managing Current Acco...