What is the impact of the nature of the activities on the working capital?

Policies for working capital include decisions relating traded assets and current liabilities in the following ways:

1. elements of composition.

2. How to use.

3. The effect of composition on the risks and returns.

  And working capital effective policies are essential for the growth of the institution and the long-term survival. The organization did not have available capital necessary factor to increase production and sales, they miss opportunities to increase sales and increase profits. Also, the organization that maintains a high level of working capital to Dbaa liquidity to enable them to face the obligations of entitlement is available, and if they got the contrary, the Foundation is facing the burdens associated with the low credit rating and compulsory liquidation.

And working capital management is an ongoing process that involves many processes and daily decisions that determine the following:

1. Enterprise Investment level in current assets.

2. debt ratio of short-term and long-term, which Ststamlh Finance Corporation assets.

3. The level of investment in each of the asset items.

4. funding sources and how they are distributed among the various sources.

5. investment differs in current assets for investment in fixed assets in the extent of the time frame required to recover the money invested in a particular asset; in the case of investment in fixed assets such as land and buildings, plant, the institution needs to be for many years to regain invested, while the invested in current assets liquidation in a short period depends on the length along the business cycle of the institution.