The Working Capital Different Types of Marketing

The availability and cost of short-term funds are subject to market vagaries; thus, to the extent a firm uses long-term funds to finance investments in current assets, it precludes the possibility of non-availability of short-term funds for financing these assets. This improves the firm's liquidity position. However, increased usage of long-term sources of financing increases the firm's cost of financing, as long-term funds are normally costlier than short-term financing. Although there are two different approaches to defining working capital, both concepts (GWC and NWC) are equally important in the management of working capital, as both are related. One is a measure of the level of current assets while the other measures the extent to which long-term sources of financing have been used to finance current assets. Key words:- Investments, Position, Increased, Normally