ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
-A A +A

Cash Working Capital vs Balance Sheet Working Capital-An Analysis Based on Four Cases

Working Capital An Analysis Based on Four Cases S K Chakraborty Working Capital in Common Parlance THE conventional definition of working capital in terms of offsetting the current claims against the firm against the current claims of the firm seems somewhat confusing. The surplus left after such offsetting is in fact equivalent to a portion of the long-term claims against the firm. One has only to visualise the Balance Sheet layout to appreciate this point. Working Capital so defined is thus really a part of long- term finance used to support current activities. This is the working capital margin money which is treated as fixed investment for project appraisals. The following simple illustration will make the point clear:

Subscribers please login to access full text of the article.

New 3 Month Subscription
to Digital Archives at

826for India

$50for overseas users

Get instant access to the complete EPW archives

Subscribe now

Comments

(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Back to Top