Working Capital Fundamentals

This course equips participants with a practical understanding of working capital fundamentals— including key definitions, calculations, and the metrics that reveal operational efficiency. Attendees will learn how trading account components such as receivable days, inventory days, payable days, and the cash cycle directly influence liquidity, profitability, and overall financial performance. By connecting working capital behavior to the balance sheet, income statement, and statement of cash flows, participants gain the insight needed to evaluate real-world business dynamics. The course also delivers actionable guidance on structuring short- and long-term credit needs, aligning loan purposes with the cash cycle, and assessing repayment capacity. A real-life example ties the concepts together, ensuring participants leave with the tools to strengthen loan decisions, identify risks early, and support a healthier loan portfolio.

Topics covered in this session

Definitions and Calculations

• Working Capital
• Current Assets
• Current Liabilities
• Working Investment
• Permanent Working Capital

Trading Accounts

• A/R Days, Inventory Days, A/P Days
• Cash Cycle

Working Capital Impacts on Financial Statements

• Statement of cash flows – sources & uses of cash
• Balance sheet - liquidity
• Income statement – sales growth requires capital

Loan Structuring

• Short-term and long-term purposes – the matching principle
• Line of credit options

Loan Repayment

• Short-term – cash cycle
• Long-term – profitability

Real-Life Example

Who Should Attend

• Credit professionals
• Lenders
• Risk managers

*This program does NOT qualify, nor meet the National Standard for NASBA accreditation.