Header Ads

Guide to make super profit through your working capital

Are you an entrepreneur, manager, marketer seeking guide to help you grow your business, here is a great opportunity for you.
What will be discuss here is knowing  how valuable your working capital is and how it help you grow your business. Net working capital can be referred in so many ways, but to me it is the difference between current asset and current liability. Some of your current liability are account payable, accurate, overdraft and so many more. Investment in current asset can affect the firms Liquidity and profitability, current asset should be manage efficiently for safe guarding the firm against the risk of illiquidity, illiquidity in the extreme situations can lead to the firm’s insolvency. If the firm does not invest sufficient funds in current asset it may become illiquid and therefore, risky. It would lose profitability, as idle current asset would not earn anything.
 They are called current because they are operating in the system that is used up or turn around within an operating system.
Having understanding what your working is, you should be able to make proper use of them that is effective management in other to allow growth and development in your firm.
The following are some of the objectives of managing your working capital;

1. To avoid inadequate current assets
2. To avoid excessive investment in current assets
3. skillful management of working capital will collate or result in profit maximization
4. It will assist in efficient sourcing of fund
It should also be noted that there are danger of excessive working capital some of which result to the following.
Waste, theft, deterioration and damage.
Speculative profit and speculative dividend.
Sign of defective policy on credit and bad management.
Sign of managerial in efficiency
Having knowledge of excessive working does not mean you should you should have inadequate working capital it also have it’s own side effects some of which are inability to undertake profitable investment, inefficient use of fixed assets leading to deterioration, loss of reputation within and outside the firm and so on.

It should also be noted when you have over surplus it may cause problem, finally work and trust in God and he shall make things perfect beyond your expectations.
The point of all this is to have an efficient working capital and proper management plan in other to boost the firm towards greater performance which lead to greater development.

1 comment:

  1. I find this guide really helpful I just have to come back to say a big thanks to you, keep up the good work.