Study Session 11 Leverage and Working Capital Management
This study session covers how companies make use of leverage and manage their working capital to meet short-term operational needs. The various types of leverage (operating, financial, total), measures of leverage, and how leverage affects a company’s earnings and financial ratios are examined. A discussion then follows on the different types of working capital and the management issues associated with each. The session concludes with techniques for assessing the effectiveness of working capital management.