Working capital is the capital available for conducting the day-to-day operations of an organization. This is normally the excess of current assets over current liabilities. Working capital management is the management of all aspects of both current assets and current liabilities, to minimize the risk of insolvency while maximizing the return on assets.

Investing in working capital has a cost, which can be expressed either as:

  • The cost of funding it, or
  • Opportunity cost of lost investment, these are opportunities because cash is tied up and unavailable for other uses.

Course Key Concepts: Working capital management, Elements of working capital, the working capital cycle, the investment in working capital and working capital ratios.

Learning Objectives
  • Explain and calculate operating and cash cycles.
  • Discover and apply different techniques used to manage working capital.
  • Identify policies relating to elements of operating and cash cycle.
  • Discover risks relating to working capital.
Last updated/reviewed: March 6, 2024
3 Reviews (30 ratings)


Anonymous Author
I liked the class - it provided a good mix of concepts and example calculations. The instructor had good inflection in speaking which made it more interesting. The wording in a few of the test questions was confusing though.

Anonymous Author
Great course for explaining what working capital is and how to use it to determine the health of a business. Highly recommend.

Member's Profile
Instructor was a bit hard to understand, but he had good content.

Course Complexity: Foundational
No advanced preparation or prerequisites are required for this course.
Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
  Introduction to Working Capital Management2:36
  Elements of Working Capital12:00
  The Objectives of Working Capital Management6:06
  Profitability Vs Liquidity11:20
  The working Capital Cycle15:20
  The Investment in Working Capital10:50
  Working Capital Management Policies14:40
  Concept of Overtrading10:26
  Understanding Holding and Inventory Period14:18
  Interpreting Trade Receivables6:42
  Strategies to Shorten Working Capital Cycle8:10
  Working Capital Management1:52:26
  Slides: Working Capital ManagementPDF
  Working Capital Management Glossary/IndexPDF