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Courses » Working Capital Management

Working Capital Management

ABOUT THE COURSE:

Working capital management has gained the attention of industry and academia as an exclusive area of study after liberalization of Indian Economy. Management of working capital sometimes becomes more important than the management of long term funds because the day-to-day operations of any business largely depend upon this source of finance. Many firms have been seen in the past closing down for the want of short term finance. The profitability of any business to a larger extent is affected by this source of finance due to efficient management of current assets and current liabilities. Hence, learning about managing working capital has become more important and critical in the modern scenario.

Important For Certification/Credit Transfer:

Weekly Assignments and Discussion Forum can be accessed ONLY by enrolling here

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Note: Content is Free!

All content including discussion forum and assignments, is free


Final Exam (in-person, invigilated, currently conducted in India) is mandatory for Certification and has INR Rs. 1100 as exam fee.


INTENDED AUDIENCE: M.Com, MBA, MFC, CA, ICWA, CS, Working professionals in the area of finance.

CORE/ELECTIVE: Elective

UG/PG: UG and PG

PREREQUISITES: NIL

INDUSTRY SUPPORT: All companies working in any area would value this course.

2782 students have enrolled already!!

ABOUT THE INSTRUCTOR:


Dr. Anil K. Sharma an Associate Professor in the Department of Management Studies, IIT Roorkee is M.Com and M. Phil, First Class First and Gold Medalist and Ph.D. in Financial Management from Panjab University Chandigarh. He is working at IIT Roorkee for the past more than 16 years has more than 22 years teaching experience in total. His area of interest is finance and accounting he has equally goods interest in research in the same area. He has published more than 100 research papers in International and National refereed journals and refereed conference. He has been awarded best paper award for his paper presented in an international conference in Thailand. He is the chief editor of two International Journals and editorial board member for three International Journals and reviewer to more than twenty International and national Journals.

COURSE LAYOUT:

Week1.  Introduction, meaning, concepts, classification and importance of working capital, Relevance of current assets and current liabilities in the balance sheet,Objectives of WCM. Over- capitalisation, under- capitalisation, zero working capital, Short-term v/s long term financing-A risk-return trade-off.Liquidity v/s profitability trade-off. Cost trade-off, Working capital approaches. Working capital management in some companies.

week2.  Factors determining working capital requirements, Assessment and forecasting of working capital requirements, Assessment and forecasting of working capital requirements, Operating cycle, Weighted Operating cycle

Week3.  Relevance of current assets and current liabilities and their inter-relationship, Management of different current assets, Management of Inventory. Relevance and scope, Deciding the optimum level of inventory in a firm, Purpose and benefits of holding inventory.

Week4.  Risk and cost of holding inventory, Inventory management - tools, techniques, Inventory management - tools, techniques, Inventory management - tools, techniques, Inventory management models

Week5.  Inventory management models, Determining stock levels and safety stocks, Types of organizations holding inventory, Inventory strategies & techniques, Inventory strategies & techniques.

Week6.  Cases on Inventory Management, Management of Accounts Receivables, Creation and size of accounts receivables, Motives of extending credit, Limitations of A/Rs-Marginal tax considerations

Week7.  Limitations of A/Rs-Tax considerations, Determining maximum length of credit period, Credit terms, opportunity costs, receivables at cost or sale price, Goals and functions of A/Rs management, Short-term changes in credit policy, Long-term changes in credit policy

Week8.  Financial statements analysis wrt. A/Rs, Financial statements analysis wrt. A/Rs, Financial, Cash management-meaning and concept statements analysis wrt. A/Rs, Cash management-meaning and concept, Cash v/s profit. Cash flow, cash stock and cash to current assets ratio

Week9.  Cash flow presentation as per IFRS, NOCF & priority outflows, Management of liquidity-Shiftability theory, Liquidity newly defined, liquidity crises 7 firm level action, Measurement of liquidity

Week10. Window dressing, Certainty model by Baumol, Uncertainty model by Miller & Orr, Cash flow forecasting, Cash collection system.

Week11. Management of Accounts Payables, Trade credits-terms of purchase, stretching accounts payables, Cost of Stretching A/Ps, The model of cost of stretching A/Ps, Overtrading and the need of a good information system.  

Week12. Financing Working Capital Gap, Sources of working capital finance, Bank finance, Tondon and Chore committees on Bank finance, Other sources of working capital finance and deciding a suitable mix.

SUGGESTED READING MATERIALS:

1. Working Capital Management by Hrishikes Bhattacharya, PHI publication.
2. Working Capital Management by R.P. Rustagi, Taxman Publication.
3. Financial Management by Prasanna Chandra, McGraw Publications.
4. Financial Management by I.M. Pandey, Vikas Publishing House.
CERTIFICATION EXAM :
  • The exam is optional for a fee.
  • Date of Exams : October 28 (Sunday)
  • Time of Exams : Morning session 9am to 12 noon; Afternoon session: 2pm to 5pm
  • Exam for this course will be available in both morning & afternoon sessions.
  • Registration url: Announcements will be made when the registration form is open for registrations.
  • The online registration form has to be filled and the certification exam fee needs to be paid. More details will be made available when the exam registration form is published.

CERTIFICATION:

  • Final score will be calculated as : 25% assignment score + 75% final exam score
  • 25% assignment score is calculated as 25% of average of  Best 8 out of 12 assignments
  • E-Certificate will be given to those who register and write the exam and score greater than or equal to 40% final score. Certificate will have your name, photograph and the score in the final exam with the breakup.It will have the logos of NPTEL and IIT Roorkee .It will be e-verifiable at nptel.ac.in/noc.