Working Captial Practice Exam

Working Capital refers to the difference between a company's current assets and current liabilities, representing the funds available for day-to-day operations. Managing working capital effectively is crucial for ensuring the smooth functioning of a business, as it directly impacts liquidity, operational efficiency, and financial stability. Skills covered in Working Capital management include financial analysis, cash flow management, inventory control, accounts receivable and payable management, and risk assessment. Prerequisites typically include a solid understanding of accounting principles, financial statement analysis, and basic knowledge of corporate finance.
Why is Working Captial important?

• Ensures sufficient liquidity for daily operations.
• Optimizes cash flow to meet short-term obligations.
• Minimizes costs associated with excess inventory and idle cash.
• Improves profitability by reducing financing costs and maximizing return on assets.
• Mitigates risks associated with cash shortages and credit default.

Who should take the Working Captial Exam?

• Financial Analysts
• Treasury Managers
• Credit Managers
• Accounting Managers
• Finance Directors

Skills Evaluated

Candidates taking the certification exam on the Working Captial is evaluated for the following skills:

• Financial analysis and interpretation
• Cash flow forecasting accuracy
• Inventory management efficiency
• Accounts receivable and payable optimization
• Credit risk assessment
• Knowledge of short-term financing options

Working Captial Certification Course Outline

1. Introduction to Working Capital Management
   • Definition and importance
   • Role in financial management
2. Cash Flow Management
   • Cash flow forecasting
   • Working capital cycle
   • Cash conversion cycle
3. Inventory Management
   • Inventory control techniques
   • Inventory turnover ratio
   • Just-in-time (JIT) inventory system
4. Accounts Receivable Management
   • Credit policy formulation
   • Accounts receivable turnover ratio
   • Collection strategies
5. Accounts Payable Management
   • Payment terms negotiation
   • Accounts payable turnover ratio
   • Vendor management
6. Short-Term Financing Decisions
   • Types of short-term financing
   • Cost of capital estimation
   • Working capital financing strategies
7. Financial Analysis for Working Capital Management
   • Ratio analysis
   • Trend analysis
   • Benchmarking
8. Risk Management in Working Capital
   • Credit risk assessment
   • Liquidity risk management
   • Interest rate risk management