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Economic essence of the working capital and its role in the activities of industrial enterprises

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PDF: Author(s): Kamaliev R. R.,
Number of journal: 4(29) Date: November 2014
Annotation:

The article has reviewed the opinions of the leading scientists on the subject of the working capital management; a brief genesis of such concepts and terms as basic and working capital, current assets, sources of formation of current assets, working capital management has been represented; classification of the working assets in accordance with applicable legislation has been provide; the cycles of the working capital management have been examined, as well as their influence on the indicators of assessment of its effective use and formation. The notion of working capital has been specified, which allows distinguishing the scope of application of the concepts «working capital management» and «current assets components management». The conclusion was made regarding necessity of use of the working capital management methods that provide for search of compromise between business profitability and the risk of liquidity loss.

Keywords:

net profit margin, liquidity ratio, working capital, working capital management, quick assets, costly cycle, credit cycle, financial cycle, left-sided risk, right-sided risk

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