Step 2 Adequate Working Capital - Trading Strategies

1. Based on the trading strategies, your working capital requirement can be estimated.
2. The cycle is a follows: creditors, cash, stocks and debtors.
3. Working capital is used to finance trade
4. Estimate cash in bank needs (days) to satisfy current liabilities
5. just in time stock
6. outstanding debtors in days
7. Outstanding creditors in days..
8. working capital =  currents assets minus current liabilties
9. Maximise creditors - negotiate for better credit terms from suppliers
10. Give priority to the working capital rather than fixed assets