2018 - Working Capital Management
Overview
According to research conducted on SMEs, up to 50% of new businesses in South Africa fail, likely because they don't manage their working capital. (Please insert the linked articles into the SAAA blog)
Join this webinar to learn how you can better manage working capital to avoid cash flow problems.
Managing inventory, debtors, cash and creditors takes dedicated time and effort with clear policies and lines of communications. Get it right and you just may save your business or get a raise.
Learning objectives
By the end of this event the participant should:
- Understand what constitutes working capital,
- Be able to identify problem areas, Be able to identify what is the cause of a slow turn-over of inventory and debtors,
- Be able to take steps to extend the payment terms with creditors,
- Develop a plan to tackle and improve poor working capital management,
- Understand liquidity and its importance in business,
- Understand how failure to control working capital leads to business collapse,
- Understand the trade-off between liquidity and profitability,
- Be able to calculate liquidity and efficiency ratios, and
- Be able to interpret liquidity and efficiency ratios.
Course content
The course will cover the following topics:
- What is working capital.
- Common things that result in negative working capital.
- Simple steps to take to improve inventory, debtors, cash, and creditor management.
- How to use problem solving techniques to get to the real cause of poor working capital management.
- The objectives of working capital management;
- Liquidity
- Profitability
- How to use the accounting cycle to better manage working capital.
- Liquidity ratios:
- Quick (acid test) ratio.
- Current ratio.
- Efficiency ratios:
- Inventory turnover.
- Inventory days.
- Trade receivable days,
- Trade payable days.
- Sales to working capital.
- Cash operating cycle.
- Interpretation of ratios.
- Case study.
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