Determination Of Finance Mix In Working Capital Management
Determination Of Finance Mix In Working Capital Management:
Determining the finance mix is an important part of working capital management. Under this decision, the relationship among risk, return and liquidity are measured and also which type of financing is suitable to meet the Working Capital requirements of the business concern. There are three basic approaches for determining an appropriate Working Capital finance mix.
1. Hedging or matching approach
2. Conservative approach
3. Aggressive approach.
Determining the finance mix is an important part of working capital management. Under this decision, the relationship among risk, return and liquidity are measured and also which type of financing is suitable to meet the Working Capital requirements of the business concern. There are three basic approaches for determining an appropriate Working Capital finance mix.
[Post Image Courtesy of DDPavumba at FreeDigitalPhotos.net]
1. Hedging or matching approach
2. Conservative approach
3. Aggressive approach.
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