Rapidly-developing business models followed by its numerous disruptions often shift the focus of companies from its working capital needs.
Nonetheless, technological advancements, GST implementation, and alternative sources for debt funding bring in the need to take a new perspective on working capital management (WCM). With predictions of WCM becoming a value driver in all businesses, its significance is at an all-time high. The broader aspect of WCM includes its role in maintaining a perfect balance amongst profitability, growth and liquidity of a trade. A proper WCM also enhances the solvency of a business by helping it meet its short-term obligations. It also strengthens the credit profile of a trade with in-time payment of debts that has a positive impact on the credit score of a business. This ensures easy availability of financial aids. Then again, entrepreneurs can opt to avail business loans to meet fund their Working capital needs. WCM also improves a business’ ability to face financial dips or crunches and helps in the convenient expansion of a business by offering adequate cash. Considering the benefits that adequate management of WC requirements brings, entrepreneurs, need to be well-versed with its comprehensive idea and approach financers in case they need help with the funding.
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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. |