Bank Credit and Circulating Capital Management

Conducting activity with banks and other activities related to maintaining the current balance sheet of the business is critical to a properly conducted ongoing of any organization.

Bank Credit

Bank credit is the total credit available to a business or an individual provided by a banker. The credit depends on the loaner's ability to obligate to repay the loan, and the total credit available at the banking institution.

Circulating Capital Management

Circulating Capital Management refers to the organization’s management accounting strategy; its role is to monitor and use the two components of circulating capital: current assets and joint liabilities; to ensure the most efficient economic activity of the organization. The primary purpose of circulating capital management is to ensure that the organization always maintains sufficient cash flow to meet the short-term operating costs.