Short Communications / Technical Notes

Working Capital Management Essentials: Principles, Strategies, and Implications for Business Performance

Ahmed S. El-Khatib

Received 20 Apr 2026, Published online: 31 Dec 2025

Published in Volume 5, Issue 2, 2025, pages 1-3

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Abstract

Working capital management (WCM) is critical to maintaining a firm's liquidity, operational efficiency, and overall financial health. It involves the management of short-term assets and liabilities to ensure the smooth functioning of day-to-day operations while minimizing the cost of capital. This article explores the core components of working capital—inventory, receivables, payables, and cash—and examines strategies to optimize each. It also discusses how effective WCM impacts profitability, risk, and firm value. The study incorporates theoretical frameworks and empirical findings to present best practices for managing working capital across various industries.

Keywords

  • Working capital
  • liquidity
  • current assets
  • current liabilities
  • cash conversion cycle
  • inventory management

References

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Licensing

© 2025 Journal of Magnetism and Its Applications. This article is published under CC BY 4.0.

How to cite

Ahmed S. El-Khatib , A. S. E. K. (2025). Working Capital Management Essentials: Principles, Strategies, and Implications for Business Performance. Journal of Magnetism and Its Applications, 5(2), 1-3.

How to Cite

Working Capital Management Essentials: Principles, Strategies, and Implications for Business Performance. (2025). Journal of Magnetism and Its Applications, 5(2), 1-3. https://jourmag.org/index.php/jma/article/view/137