Chapter 6, Problem 3DQ

Summary Introduction

To explain:The significance of matching sales and production in working capital management.

Introduction:

Working capital management:

The strategy of a company to ensure or monitor that it uses its current assets and current liabilities efficiently is termed as working capital management. The working capital of a company comprises of investments in current assets, such as short-term assets like cash and bank balance, inventories, receivables, and marketable securities.