Abstract
The level of working capital is also the result of a financial arbitrage between margins and costs. Working capital is an investment, like any other, and accordingly it has to be managed. Management of working capital does not necessarily mean reducing it at all costs. Working capital is the result of a playoff between liquidity and margins. This chapter describes all of the techniques and tool for managing working capital. Financial managers will, this time internally, have an opportunity to demonstrate their teaching skills and negotiating talents. Management of working capital does not necessarily mean reducing it at all costs. Working capital management is also a cultural issue. Managing working capital is a timeless problem, even if some situations are better than others for highlighting the issue. The impact on margins is less of an issue. During economically good times, the firm will focus more on sales and margins than on working capital.