It proposes a strategy by which the fluctuating part of the current assets are financed by the current liabilities.

Although working capital management focuses on short-term asset and liabilities, the relevant decisions indirectly determines the available funding for investments.

Working capital management has great significance for all companies, but it is more critical for smaller companies which have more restricted funding capabilities.

As a means of survival in the market place, timing and availability of the required funds is critical.

The availability of funds contributes to the activity level in the short- run and potential growth by realizing investments in the long-run.