Answer: Working capital management involves monitoring of cash flow, current assets, and current liabilities.
It's main function is to ensure that business's day-to-day operational expenses are met with positive/maintained cashflow statements.
Influences that has an effect in decision making in Working Capital Management -
Type of Business- Businesses having higher operations or their main core business is their operating activities like Food Delivery Companies, Online Cab Booking companies. Their CASH BURNING ratio is higher.
Production Technique- If they are sourcing raw material from anywhere and rest whole process of production are done by them than their operational cost will be higher. Example- A Ready made Cloth manufacturing company that only sources cotton, silk or any other material from farmer and rest all processes like spinning, weaving, dying etc are done by them than their Working Capital Management should be strong to avoid both wastage of Resources and Money.
Economical changes- Periods of BOOM & DEPRESSION effects decision making a lot. As Organisations have to preserve or burn the working capital as per ma
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