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Working Capital Management

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Before starting this self study program, please go through the instructional document.


  • Working Capital
    4 mins
  • Conservative working capital strategy
    18 mins
  • Cash Management
    24 mins
  • Using Lockboxes to Accelerate Cash Receipts
    34 mins
  • Cash Forecast
    50 mins
  • Marketable Securities Management
    63 mins
  • Impact of Credit Policy Action
    79 mins
  • Inventory Management - Lead time and Safety Stock
    94 mins
  • Sources of Short-term Credit
    109 mins
  • Short-term credit - Uses of Bankers Acceptance
    117 mins
  • Cost of Short-term credit
    126 mins

Course Description

A significant amount of management time in many businesses, particularly small businesses, is devoted to assuring that there will be sufficient cash to pay employees, vendors, and creditors. While the expression “Cash is King” has some truth, a solid understanding of the inter-relationships between working capital components is necessary for all businesses to succeed in the long run. 

Working capital is the current assets used in a business, which are typically financed by current liabilities. While the time frame for current assets and current liabilities is typically one year, working capital management has long-term implications for many firms. 

Working capital management focuses on two basic questions: (1) What is the appropriate level of current assets for a firm to carry, both in total and for each specific group, and (2) how should current assets be financed. 

The course is made up of 8 modules that examine working capital management at a macro and micro level. Starting with a discussion of a firm’s appetite for risk and the implications of having too much and too little working capital, the course then explores issues related to managing types of current assets, including cash, marketable securities, receivables, and inventory. The types of short-term credit to finance current assets are then covered, followed by a discussion of the costs of short-term credit. 

The course content covers working capital management topics tested in the Certified Management Accountant (CMA) Part 2 examination. 

Topics include: 

  • Working capital risks and strategies. 
  • Cash management. 
  • Cash forecasts. 
  • Marketable securities. 
  • Receivables management. 
  • Inventory management. 
  • Short-term credit. 
  • Costs of short-term credit. 

Learning Objectives

  • To recognize the components of working capital and calculate net working capital
  • To explore the factors that determine the risk appetite of an organization.
  • To explore how risk affects a firm’s approach to managing working capital.
  • To identify working capital opportunity costs and the tradeoffs between liquidity risk and return on assets.
  • To explore the impact changes in credit policy have on accounts receivable, working capital and sales volume.
  • To identify the different types of short-term credit, including trade credit, short-term bank loans, lines of credit, commercial paper and bankers’ acceptances.
  • To explore how to calculate the effective interest rate of trade discounts and calculate the effective interest rate on loans with compensating balances.

Who Should Attend?

  • Finance Director
  • Finance Pros
  • VP Finance