Working capital management involves managing the firm’s liquidity, which—in turn—involves managing the firm’s investments in current assets and in the use of current liabilities.
Explain the determinants of net working capital and the cash conversion cycle. How can these strategies be used in Saudi Arabian companies? Why is working capital so important to a firm when the presence of credit and leverage tend to be utilized more? What advantage does a highly liquid firm have over a highly leveraged firm? Explain.
