Working capital management at Alberta Fire and Security Ltd : a case study

Abstract

Working capital management is the management of both current assets and current liabilities so as to minimise the risk of insolvency while maximising return on assets. Maintaining adequate working capital is not just important in the short-term but is a key factor in an organisation's long-term success. Adequate liquidity is needed to ensure the survival of the business in the long-term. The working capital needs of a particular business are likely to change over time as result of changes in the commercial environment. This means that working capital decisions are rarely one-off decisions. Managers must try to identify changes in attempt to ensure that the level of investment in working capital is appropriate. This dissertation was conducted with the aim of evaluating, analyzing and recommending on the management and control of working capital at Alberta Fire and Security Ltd. Furthermore, this study focuses on the Company's working capital ratios with the scope of identifying trends and assisting in devising possible strategies for improving current working capital positions.