Effects Of Working Capital Management On Business Operations (A Study Of Pz Cussons Plc)

ABSTRACT

The Nigeria Economy is faced with several challenges which could impede the speed of having a huge return on the resources employed by the firm. As a result, however, proper initiative and capital management is required. It is worthy to note that out of every resource that a firm has, working capital is the most important.Working Capital refers to the capital available for running day-to-day operations of an organization. Working Capital is a financial metric which represents the operating liquidity available to a business. Along with fixed assets such as plants and equipment, working capital is considered as a part of a company's operating capital, referring to current assets such as cash at hand, cash at bank, raw materials, work-in-progress, finished goods, accounts receivable, and etc. To measure the efficiency of a company's working capital, people often use net working capital which is defined as the difference between current assets and current liabilities. If current assets are higher than current liabilities, this company has working capital efficiency, explaining the company's ability to continue its operations and to have sufficient funds to satisfy both maturing short-term debt and upcoming operational expenses Working capital management involves planning and controlling current assets and current liabilities in a manner that eliminates the risk of inability to meet due short-term obligations on one hand and avoid excessive investment in these assets on the other hand (Eljelly,2004).