The working capital calculation can give short term financial position and the creditworthiness of the company. A business should have a healthy cash flow to maintain efficiency and liquidity. Working capital fluctuates on a daily basis but can be maintained by improving the working capital cycle. Here are a few points that can help balance the working capital cycle. • Better management of inventory through real-time updates
• Money should be spent wisely on all the expenses • Collection of bills receivables on time Business may at times, face financial crunch, bankruptcy, and negative balance. In order to keep functioning, the business needs to generate working capital or take monetary support from the financial or non-financial institutions. Here are some ways of generating working capital. • Working capital loan Safest and quickest way of fulfilling your monetary needs, working capital loans do not require any security, and you can avail a loan up to Rs. 30lakh. The loan typically gets approved within just 24 hours. The borrower pays interest only on the amount utilized in the business cycle. • Selling of assets The assets which are least useful to the company can be sold to meet your working capital requirements. Selling off the underutilized assets can help maintain financial health. • Crowdfunding A business, when faced with a cash crunch, can generate the required funds from investors or customers. While there is no guarantee that you will collect your required capital, this method could work out cheaper. Read Also: 4 Best Sources Of Working Capital For Your Small Business
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AuthorAman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management. |