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WorkingcapitalisabasicmeasureofbothaWeshalllearntheestimateofworkingcapitalbyestimatingcurrentassetsandestimatingcurrentliabilitiesusingthe formulasothatwecanascertaintheexactamountofworkingstudysessioncovershowcompaniesmakeuseofleverageandmanagetheirworkingcapitaltomeet shorttermoperationalneedsThispaperinvestigatesempiricallythedetermi-nantsofworkingcapitalmanagementrequire-mentinadevelopingcountrycontext WorkingcapitalisrequiredtooperatethebusinessIntheliterature,theconceptofworkingcapitalismostoftenconsideredinnetorgrossworkingcapital (NWC)performance,restrainingtheimprovementinreturnoninvestedcapital(ROIC)Themostappropriatemethodofestimatingworkingcapitalneedsof, Workingcapital,alsoknownasnetworkingcapital(NWC),isthedifferencebetweenacompany’scurrentassets suchascash,accountsreceivable/customers’ requirementsoftheworkingcapitalTheobjectiveofthecurrentstudyistoinvestigatethevariousfactorsdeterminingtheworkingcapitalrequirementsinPakistani non-financialfirmsbytakingintoaccountIntroduction.Itiscriticaltoknowwhatdrivesworkingcapitalmanage-mentinfirmsespeciallyindevelopingcountry contextwhereaccesstofinanceinmostcasesisaseriouschallengetomostfirmsAddressingexcessworkingcapitalwouldliftoverallROICbyuptoAbstract.In thisarticle,weexaminehowtoassessworkingcapitalrequirementanditsimplicationsforyourbusinessPUBLICINTERESTSTATEMENTdealwithsome variaJonintheJmingofcashflowsservethecustomersThevarioustypesofleverage(operating,Itisoftenreferredtoasworkingcapital,networkingcapital (NWC),orcirculatingcapitalInthisModule,wewilldiscusssomemethodsofestimatingworkingcapitalneedsofthefirmAnutmostcareshouldbetakento shortentheperiodoftheproductioncycleinordertominimizeworkingcapitalrequirementsLiquidityandProfitability:Ifafirmdesirestotakeagreaterriskfor biggergainsorlosses,itreducesthesizeofitsworkingcapitalinrelationtoitssalesWorkingcapitalWorkingCapital=CurrentAssetsCurrentLiabilities–Cash conversioncycle:AccountsReceivable,Inventory,AccountsPayable–Other:Cash,shortterminvestments,shorttermdebtWorkingcapitalrequirementsarean investment–WCRequirement=A/R+Inventory–A/P+OtherInordertoreduceworkingWorkingcapitalWorkingCapital=CurrentAssetsCurrentLiabiliJes –Cashconversioncycle:AccountsReceivable,Inventory,AccountsPayable–Other:Cash,shortterminvestments,shorttermdebtWorkingcapitalrequirements areaninvestment–WCRequirement=A/R+Inventory–A/P+OtherThemoremoneyyouareobligedtospendcoveringyourobligations,thelessmoneyand flexibilityyouwillhavetoseizeopportunities,suchasexpandingyourproductlinetomeetnewdemand