Article Provided By: Janet Schlarbaum

Author: Alfred Anderson

The success of an organization depends on how effectively its working capital is managed. Day to day operational expenses pertaining to advertising, salaries, rent etc. needs to be met on a regular basis and thus proper management of working capital is essential. Managing working capital typically refers to strategies being implemented to maintain the requisite amount of operating liquidity on a day to day basis. This involves management of a company’s short term assets and liabilities to ensure sufficient cash flow to satisfy short term debt and other operational expenses.

Working capital decisions are short term which is based on cash flows and profitability of a business. Hence measurement and estimation of the profitability is vital. Cash flows can be measured with the help of cash conversion cycle i.e. the time required to convert raw materials into finished products which is then converted into sales. Profitability can also be measured with return on capital and return on equity. These metrics helps a company in understanding its cash flows thereby implementing the techniques to manage proper flow of cash, inventory, managing debtors and looking after the short term finance needs.

Many companies opt for loans to get the required working capital. Loans essentially are of two types, secured and unsecured. Secured loans are lent in exchange of collateral whereas unsecured loans do not need collateral. However, the rate of interest in case of an unsecured loan is generally higher than secured loans. Furthermore, the borrower is also bothered about the monthly repayments until the loan amount is fully repaid.

An entrepreneur who wants to opt for hassle free finance should ideally opt for a business cash advance. Qualifying for a cash advance is not too demanding either. The business should accept credit cards as a form of payment and be in operation for at least for 2 years. Apart from that the business should process a minimum amount of payment per month. In case of cash advance the borrower does not need to be concerned about monthly repayments. The money is automatically repaid through the credit card receivables.

Article Provided By: Janet Schlarbaum

Author: Mika Hamilton

Asset Management

Someone is going to have to be responsible for the management of your assets in the portfolio. Whether you do it yourself, as many people do, or let an institution do it for you, developing a solid investment portfolio means that it must be watched. Whoever has the responsibility needs to be able to check it on a regular basis and must be reliable. He or she should also be knowledgeable about the markets in order to make the best decisions.

Along with the watching, however, comes the responsibility to handle the assets to your best overall profit. Assets need to be removed occasionally from one stock or mutual fund and placed into a more productive one. The manager will need to know when this is necessary, because moving funds too often can only end up being more costly than it is worth.

Multiple Instruments

Creating the greatest amount of profit also includes the need to diversify. All of your assets should not be held in one stock, or even in one type of stock, such as communications. When all of your eggs are in one basket, it is easy to lose them all at the same time. When you diversify, however, and place some in various types of stock, and some in bonds and mutual funds, what affects one market should not affect them all.

Constant Analysis

In order to ensure the greatest amount of profitability in an investment portfolio, it will need to be carefully watched. Daily changes need not be observed, however, but trends. The market overall fluctuates from day to day, but a long term point of view should indicate general trends of increasing or decreasing profitability. When the losses are either too great, or appear to be heading for trouble, it is time to make the transfer and place those assets into more profitable instruments.

Performance Objectives

A good investment portfolio should have performance objectives in place so that the one managing the assets knows how soon to move the assets. If you want the highest possible performance on your portfolio, then this will necessitate a lot of changing instruments or stocks - especially when the market fluctuates a lot - like it is now.