As a result, companies may offer incentives to their customers to collect the receivables sooner. Conversely, a company may also ask its supplier for better terms allowing the company to pay at a later date. Monitoring and analyzing working capital helps companies manage their cash flow needs so that they can meet their operating expenses […]

Industries with longer production cycles require higher working capital due to slower inventory turnover. Alternatively, bigger retail companies interacting with numerous customers daily, can generate short-term funds quickly and often need lower working capital. Conversely, a company that has consistently excessive working capital may not be making the most of its assets. While positive working […]