CHAPTER 5: WORKING CAPITAL MANAGEMENT

Chapter Outcomes

Upon completion of this chapter, the learner should be able to:

Explain the terms working capital, net working capital, working capital policy and working capital management
Calculate the working capital cycle in days
Describe the impact of inflation on working capital
Outline the various working capital policies and their respective impact on risk and return
Outline the various working capital financing policies and their respective impact on risk and return
Calculate the working capital funding requirements using the percentage of sales method
Identify the factors that will influence future sales

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