Concept and meaning of working capital – Liquidity and profitability – Identification of factors affecting working capital requirements – Theories of working capital.

Approaches to estimation of working capital – Operating cycle approach. Management of inventories – Determination of optimum inventory – Lead time – Safety stock – EOQ approach.

Management of receivables – Credit and collection policy – Credit standards – Credit terms – Credit analysis – Management of payables – Maturity matching.

Management of cash – Accelerating cash inflows – Managing collection – Control of disbursement – Determining optimum level of cash – Cash budgeting –Investment of surplus cash.

Sources of working capital finance – Approaches to optimum mix of funds – Trade credit Accrual accounts – Money market instruments, Commercial paper , Certificate of deposits , Factoring of forfeiting – Inter corporate Loans – Short term bank loans.