What is the reason for the poor working capital management ability?

1, the liquidity is too large and strong, indicating that the asset utilization rate is not high; If the liquidity is too small, the liquidity will be poor, indicating that there are many problems with current assets and the potential debt repayment pressure is great.

2. The liquidity is too small, indicating that fixed assets investment is highly dependent on short-term loans and other liquidity financing, and may face certain operational difficulties.

In order to maintain normal operation, enterprises must have appropriate working capital, and to manage working capital well, we must solve the problems of current assets and current liabilities.

First, how much should an enterprise invest in its current assets, that is, the management of the use of funds. It mainly includes cash management, accounts receivable management and inventory management.

Second, how to finance the current assets of enterprises, that is, the management of fund raising. Including the management of short-term bank loans and commercial credit.

It can be seen that the core content of working capital management is the management of capital utilization and fund raising, so as to maintain a reasonable and necessary structure or proportion between them and enhance the liquidity of current assets.