What Is Working Capital Management? Working capital management is a business strategy designed to ensure that a company operates efficiently by monitoring and using its current assets and liabilities to their most effective use. The efficiency of working capital management can be quantified using ratio analysis. Key Takeaways Working capital management requires monitoring a company’s assets and liabilities to maintain sufficient cash flow to meet its short-term operating costs and short-term debt obligations. Managing working capital primarily revolves around managing accounts receivable, accounts payable, inventory, and cash. Working capital management involves tracking various ratios, including the working capital ratio, the collection ratio, and the inventory ratio. Working capital management can…