recommend four working capital management strategies to ensure the company remain competitive in the market

Expert Solution

Four Working Capital Management strategies are as follows-

A. company should be trying to improve upon their cash conversion cycle because improvement of the cash conversion cycle would be helping the company in having an optimum amount of liquidity on its hands

B. Company should be trying to have an optimal capital structure which will be having an adequate amount of debt capital so that there would be a fixed repayment which can be easily provided for with generation of cash flows and it will ensure optimal liquidity.

C. Company should also try to match its asset with its liabilities and this duration matching will be helping the company in order to eliminate the risk associated with liquidity crisis

D. The company should also be trying to have an optimal additional coverage for debt payment in form of sinking fund which can provide it optimum flexibility and liquidity, when there will be a payment of debt capital and hence the company will still be having a optimum amount of liquidity due to proactive management of sinking fund.

jeff jeffy answered 1 year ago

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