What is working capital management?
Working capital management comprises the planning, management and optimization of a company's short-term capital. Working capital is the difference between current assets, such as receivables and inventories, and current liabilities, such as supplier credits. Effective management ensures that sufficient liquid funds are available to meet current obligations without tying up capital unnecessarily. By striking the right balance between cash flows, inventory and liabilities, a company can secure its financial stability, reduce costs and make better use of growth opportunities. It also helps to reduce dependency on external financing and strengthen the negotiating position with suppliers and customers. Particularly in economically challenging times, well thought-out working capital management is a decisive success factor for companies.
The importance of working capital management
The importance of working capital management lies in its central role in the financial health and stability of a company. It ensures that sufficient cash is available to meet ongoing obligations such as salaries, invoices and supplier payments on time without tying up capital unnecessarily. Effective working capital management helps to reduce operating costs, improve cash flow and avoid financial bottlenecks. It also strengthens a company's competitiveness by providing more flexibility when investing and negotiating with suppliers and customers. In times of economic uncertainty or market volatility, good working capital management can make the difference between growth and financial difficulties.
Improve working capital
Improving a company's working capital requires efficient management of inventories, receivables and liabilities. Through targeted inventory management, the company can optimize stock levels, avoid overstocking and thus free up capital that would otherwise be tied up unnecessarily. Effective receivables management ensures that payments are received quickly and reliably by actively monitoring outstanding receivables and clearly defining payment terms. At the same time, liability management can help to improve liquidity without straining the relationship with suppliers by making strategic use of supplier credit and negotiating more favorable payment terms. A balanced combination of these measures ensures a better cash flow, reduces the risk of bottlenecks and strengthens the company's financial flexibility.
Everything about working capital management in one template
Present the most important information on the topic of working capital management and emphasize its importance for the success of your company. Learn how to optimize your working capital and ensure the financial health of your company. You can also use our collection of the most important key figures and monitor the success of your own working capital management. With our professionally designed template for PowerPoint, you will be able to convey the topic convincingly without wasting a lot of time on research and design. Start your presentation right away and download our presentation today.
With this template for PowerPoint …
- present important information on the subject of working capital management.
- learn how to optimize your working capital.
- you receive numerous key figures for monitoring your working capital management.
This PowerPoint template contains:
- Quote
- What is working capital management?
- Definition
- The mission of working capital management
- Significance for the company
- The current situation in working capital management
- Objectives of working capital management
- Risks of insufficient working capital
- How high should the working capital be?
- What factors influence demand
- Different types of working capital
- Components of working capital
- Composition of working capital
- Working capital from a balance sheet perspective
- Gross and net working capital
- Cash flow vs. working capital
- Current assets
- Examples of current assets
- Current liabilities
- Examples of current liabilities
- How to improve working capital
- Balancing central business functions
- The three pillars of working capital management
- Inventory management
- Just-in-time
- Receivables management
- Discounts for early payment
- Liability management
- Payment terms
- Best Practices
- Key figures
- Working capital ratio
- Days payable outstanding (DPO)
- Days sales outstanding (DSO)
- Days inventory outstanding (DIO)
- Cash conversion cycle (CCC)
- Inventory turnover
- Days working capital (DWC)
