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Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.

The purpose of this paper is to examine the relationship between net working capital and firm value for a sample of 2,483 firms across 16 Asian countries. In addition, this study also examines the impact of degree of financial development and law enforceability on net working capital-firm value relationship.

The study is based on secondary financial data of 2,483 Asian firms obtained from Bloomberg database, pertaining to a period of five years. This study employs the fixed effects approach to arrive at results.

Results of the study confirm a strong negative relationship between net working capital and firm value. In addition, the author also found that the negative relationship between net working capital and firm value to be strong for countries that have a high degree of financial development and law enforceability.

Unlike prior studies, this study examines the relationship between net working capital and firm value. In addition, this study also tests the impact of degree of financial development and law enforceability on this relationship. To the best knowledge, no such study has been conducted in the Asian context.

The purpose of this paper is to analyze the status of gross and net working capital and their association with sales of Andhra Pradesh Paper Mills Ltd, with reference to the Indian paper industry over a decade, from 1999 to 2008.

The research is mainly based on secondary financial data obtained from the Centre for Monitoring Indian Economy (CMIE). It focused on the size, character, and annual growth rates of gross and net working capital of the company. In addition, it analyzed the growth trends of gross and net working capital of the company in relation to sales. With the help of the Karl Pearson's correlation model, the inter‐relationship between sales and working capital has been identified. Then the strength and significance of such a relationship has been tested with the use of other statistical tools such as coefficient of determination and Student's t‐test.

The major findings of the research showed that while there was an increase in sales positively, strongly, and significantly associated with an increase in gross working capital for both the company and the industry, its association with net working capital was negative, poorly related, weak, and insignificant for the company under study.

There is a dearth of studies in the world literature that discuss the relationship that exists between sales and working capital in India's paper industry, in general and Andhra Pradesh Paper Mills Ltd in particular, and therefore this research is expected to add significant value to exploring the said linkage.

The purpose of this paper is to investigate the relationship between working capital management and corporate performance with financial constraints.

This study uses large panel sample of Chinese listed firms over the period 2005–2015 using system generalized method of moments (GMM) estimator that controls unobserved heterogeneity of individual firms well and GMM methodology is robust to address endogeneity issues.

Empirical evidence finds inverted U-shaped relationship between working capital and corporate performance and exhibits similar evidence for financially constrained firms. Evidence shows impact of high sales and discounts on early payments at low level of working capital and dominance of opportunity cost and cost of external finance at high level of working capital. The findings of the results show that optimal working capital level of financially constrained firms is relatively lower due to high cost of external capital and debt rationing. The results also indicate that on average NET is significantly lower for firms with Tobin’s Q>1 than firms with Tobin’s Q=1, and suggest that aggressive working capital management is significantly and positively associated with higher corporate values.

This paper is among few that complement the existing literature by providing evidence that inverted U-shaped relationship between working capital management and corporate performance also exists in the context of Chinese listed non-financial firms. Exclusively, the relationship of working capital and corporate performance with linkage of financial constraints is scant in the context of Chinese listed non-financial firms.

Over the past 40 years major theoretical developments have occurred in the areas of longer‐term investment and financial decision making. Many of these new concepts and the related techniques are now being employed successfully in industrial practice. By contrast, far less attention has been paid to the area of short‐term finance, in particular that of working capital management. Such neglect might be acceptable were working capital considerations of relatively little importance to the firm, but effective working capital management has a crucial role to play in enhancing the profitability and growth of the firm. Indeed, experience shows that inadequate planning and control of working capital is one of the more common causes of business failure.

The objectives of this study are to offer cash based funds flow components as an alternative to financial ratios for classifying the financial performance of companies; to test empirically the ability of funds flow components to distinguish between failed and nonfailed companies with special emphasis on working capital components; to analyse the empirical results and make recommendations for future study.

The purpose of this study is to introduce working capital efficiency multiplier (WCEM) as a direct profitability measure of working capital management. The existing accounting measures in the literature establish an indirect approach to study the relationship between working capital efficiency and profitability of the firms.

Using the help of a set of companies from CMIE Prowess database, the study introduces WCEM as a direct profitability measure of working capital efficiency.

In this study, a new direct measure of working capital efficiency is introduced which is multiplicative in nature. WCEM is a product of three components, namely, WACC, ratio of the sum of trade receivables and inventories to trade payables and ratio of net working capital (NWC) to net sales.

The importance of direct measure like WCEM could be enormous in performance evaluation of a firm. It can be used as an indicator for choosing a suitable investment opportunity by an investor. This is due to the fact that the firm that is highly efficient in managing working capital is less exposed to liquidity risk. At the same time, the firm is less dependent on external financing. Therefore, such firms eventually create more value for their shareholders. Another indication that WCEM provides is to gauge the bargaining power of the firm and its competitive position in the market. Lower WCEM indicates higher bargaining power of a firm across the value chain, and its superior position relative to its competitors.

Most of the studies on WCM are of the empirical type and there is a complete dearth on theoretical framework. Researchers hereafter can consider WCEM as one of the financial performance variables in place of the existing measures such as return on asset (ROA), return on invested capital (ROIC), return on equity (ROE), gross operating income (GOI) and net operating income (NOI) and thereby can contribute new empirical insights through their research outcomes.

This paper aims to examine the influence of cash flow on the relationship between net working capital and firm performance.

The paper uses unbalanced panel data regression analysis on a sample of 6,926 non-financial small and medium enterprises in the UK for the period from 2004 to 2013.

The results indicate a strong concave relationship between net working capital and performance in the absence of cash flow; however, the relationship becomes convex after taking cash flow into consideration. The results further show that firms with cash flow below the sample median exhibit lower investment in working capital, but firms with cash flow above the sample median have higher investment in working capital. The results suggest that managers should consider their firms cash flow when determining the appropriate investment to be made in working capital, so as to improve performance.

Overall, the results suggest that whilst firms with limited cash flow should strive to reduce investment in working capital, firms with available cash flow should increase investment in working capital to improve performance.

This current study incorporates the relevance of cash flow in assessing the association between working capital management and firm performance.

Economic recessions have severely stretched the financial resources of many businesses. One result has been to focus attention on the management of working capital in companies that have often had to remain solvent by shrinking.

The article highlights potential mismeasurement in working capital allocations among academicians and practitioners and revisits the relationship between firms' working capital and productivity, as evident from their values.

The research design acknowledges the relative role of firms' working capital vis-a-vis other assets in generating revenue, thereby effectively accounting for the overall asset efficiency in influencing firm value. The authors use a multivariate framework to draw inferences from the marginal impact of working capital and its components on firm value while controlling for asset utilization.

The authors find that, after accounting for asset utilization, the marginal impact of working capital and its components on firm value is quite weak. The results are consistent with the hypothesis that firms' trade-off between short-term and long-term assets per se should not have any value implications. After controlling for their asset turnovers, the authors find that higher allocations to working capital relative to other assets are not necessarily value-destructive. The findings contrast with the past literature.

The article, through its analytical and empirical insights, suggests that working capital allocations should be measured by managers and academicians relative to firms' other asset rather than their sales. Firm values should, therefore, be compared based on firms' overall asset utilization rather than inter-temporal allocations to short-term versus long-term assets.

Contrary to the existing literature so far, the article explicitly acknowledges the relative role of firms' other assets, and hence the overall asset utilization, to infer the marginal impact of working capital on firm value.