WORKING CAPITAL MANAGEMENT POLICY
Working Capital Management formulates policies to manage and handle efficiently; for
that purpose, the management established three policies based on the relationship between
Sales and Working Capital.
1. Conservative Working Capital Policy.
2. Moderate Working Capital Policy.
3. Aggressive Working Capital Policy.
1. Conservative working capital policy: Conservative Working Capital Policy refers
to minimize risk by maintaining a higher level of Working Capital. This type of
Working Capital Policy is suitable to meet the seasonal fluctuation of the
2. Moderate working capital policy: Moderate Working Capital Policy refers to the
moderate level of Working Capital maintainance according to moderate level of sales.
It means one percent of change in Working Capital, that is Working Capital is equal
3. Aggressive working capital policy: Aggressive Working Capital Policy is one
of the high risky and profitability policies which maintains low level of Aggressive
Working Capital against the high level of sales, in the business concern during
a particular period.