Is working capital really working? / Siti Huriah Megat Mohd Yusoff

The measurement and disclosure of working capital on the financial statement which is in the balance sheet has been considered as an appropriate accounting functions for decades. It has been followed for the purpose of financial analysis almost without question. However, the young generation of accounting professionals are arguing that the disclosure of working capital in the balance sheet is less important in determining liquidity position. Some of them even claimed that the working capital concept is misleading. This project paper was carried out with a purpose to understand clearly the concept and to analyse as to whether the presentation of working capital items is able to provide a true and fair view of liquidity position.