The document discusses working capital management and mismanagement. It defines working capital and the objectives of working capital management as ensuring sufficient liquidity, minimizing insolvency risk while maximizing returns. It also discusses the different types of working capital such as gross working capital, net working capital, permanent working capital and temporary working capital. The working capital cycle and examples of current asset mismanagement at companies like Sail & Tata Steel Ltd. are also summarized.

1. Mismanagement of Working Capital
Working Capital Loans
2008
2010
2012
SPM
School of
Petroleum
Management
PDPUPandit Deendayal Petroleum University

2. What is working capital

3. Objective of Working Capital Management
• To ensure sufficient liquid resources
• To minimise the risk of insolvency while
maximising the return on assets
• To maintain the optimum balance of each of the
working capital components.
• For the purchase of raw materials, components
and spares.

4. Types of Working Capital
WORKING CAPITAL
BASIS OF
CONCEPT
BASIS OF TIME
Gross Working
Capital
Net Working
Capital
Permanent /
Fixed WC
Temporary /
Variable WC

5. THE WORKING CAPITAL CYCLE
(OPERATING CYCLE)

6. Current Asset Mismanagement
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7. Current Asset Mismanagement
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8. Current Asset Mismanagement
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Sail & Tata Steel Ltd