There are no prerequisites.

Course Description

An essential financial issue that is routinely overlooked is working capital. This mix of short-term assets and liabilities can absorb a remarkable amount of funding without management even realizing what is going on. Working Capital Management discusses how to reduce the adverse funding effects caused by working capital, including specific recommendations on how to manage cash, receivables, inventory, and payables. The course also addresses the operational characteristics that will allow a business to function with zero working capital and characteristics of different types of asset-based lending.


Steven M. Bragg, CPA

Steven M. Bragg, CPA, is a full-time book and course author who has written more than 70 business books. He provides Western CPE with self-study courses in the areas of accounting and finance, with an emphasis on the practical application of accounting standards and management techniques. A sampling of his courses include the The New Controller Guidebook, The GAAP Guidebook, Accountants’ Guidebook, and Closing the Books: An Accountant’s Guide. He also manages the Accounting Best Practices podcast.

Steven has been the CFO or controller of both public and private companies and has been a consulting manager with Ernst & Young and an auditor with Deloitte & Touche. He holds an MBA from Babson College, a Master of Finance from Bentley College, and a BA from the University of Maine (summa cum laude).

Course Specifics

Dec 11, 2017
There are no prerequisites.

Compliance Information

Qualifies for CA Fraud: No

Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Recognize the conditions that can lead to zero working capital.
  • Identify the proper type of financing to be used for different working capital conditions.

Chapter 2

  • Note the sources of information used for the development of a cash forecast.
  • Recognize the benefits of cash concentration and the types of available cash sweeps.
  • State the characteristics of the different types of short-term investments.

Chapter 3

  • Note how the receivables investment will change in conjunction with differences in payment terms granted.
  • Identify the possible contents of a credit rating system and how the scoring is organized.
  • Recognize the circumstances under which software can be used to enhance collection activities.
  • Note the structure of the measurements used to monitor accounts receivable.

Chapter 4

  • State the activities that can be used to reduce the overall investment in inventory.
  • Recognize the activities required to ensure the success of a produce to order system.
  • Note the behavioral effects of using inventory measurements.

Chapter 5

  • Identify the different types of float.
  • State the different types of signals that may be sent to a supplier as part of the process of obtaining more credit.

Chapter 6

  • Note the operational requirements demanded by lenders for asset-based lending arrangements.
  • Recognize the contents of a borrowing base calculation.

Table of Contents

 Chapter 1 – Working Capital Concepts

Learning Objectives


The Nature of Working Capital

The Importance of Working Capital

The Optimum Amount of Working Capital

Zero Working Capital

Working Capital for a Growing Business

Working Capital for a Declining Business

Responsibility for Working Capital


Chapter 1 – Review Questions

Chapter 2 – Cash and Investment Management

Learning Objectives


Reasons to Hold Cash

The Cash Forecast

The Short-Term Cash Forecast

The Medium-Term Cash Forecast

The Need for Cash Concentration

Cash Sweeping

The Zero Balance Account

Multiple Sweep Arrangements

Manual Sweeping

Sweeping Rules

Sweep Problems

Sweep Costs


Notional Pooling

Notional Pooling Problems

Notional Pooling Costs


Multi-Tiered Banking

Hybrid Pooling Solutions

Cash Concentration Best Practices

Cash Concentration Alternatives

Investment Guidelines

Investment Strategy

Types of Short-Term Investments

Money Market Funds

Commercial Paper

Certificates of Deposit

Bankers’ Acceptances

U.S. Government Debt Instruments


Chapter 2 – Review Questions

Chapter 3 – Receivables Management

Learning Objectives


The Receivables Component of Working Capital

Receivables Strategy

Credit Exposure Risk

Internal Credit Rating System

Third Party Credit Ratings

Credit Insurance

Terms Alterations

Receivables Financing

Portfolio Approach to Risk

Cross-Selling Credit Exposure Risk

Early Payment Discounts

Billing Impact on Working Capital

Collections Management

Other Cash Acceleration Techniques

Receivables Measurements

Days Sales Outstanding

Bad Debt Percentage

Receivables Aging Report


Chapter 3 – Review Questions

Chapter 4 – Inventory Management

Learning Objectives


The Inventory Conundrum

Effective Inventory Management

Reduce Product Options

Shift Ownership

Reduce Inventory Reserves

Compress the Process

Rationalize Distribution

Prevent Obsolete Inventory

Engage in Rapid Disposition

Improve Inventory Records

Adjust Policies

Additional Concepts

Produce to Order (Pull) System

The Focus of Inventory Analysis

Responsibility for Inventory Reduction

Inventory Measurements

Inventory Turnover Ratio

Raw Materials Turnover

Work-in-Process Turnover

Finished Goods Turnover

Returnable Inventory Valuation

Opportunity Cost of Excess Inventory


Chapter 4 – Review Questions

Chapter 5 – Payables Management

Learning Objectives


Terms Enhancement

Effective Payables Management


Early Payment Discounts

Payables for Distressed Businesses

Supplier Signaling

Special Situations

Payables Measurements


Chapter 5 – Review Questions

Chapter 6 – Asset-Based Lending

Learning Objectives


The Line of Credit

Invoice Discounting

Inventory Financing

The Borrowing Base

Inventory as Collateral


Chapter 6 – Review Questions

Review Question Answers and Rationales




Final Examination

Answer Sheet

Course Evaluation

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