Working capital investment policy considers the level of current assets used to support revenue generation in relation to different companies.

A company adopts an aggressive working capital invstment policy relate to another company if it uses a lower level of current assets to support a similar level of revenue geration. Conversely, the second company adopts a converative working capital investment policy relative to the first company.

While there are no companies here with which to compare P working capital investment policy, the effect of implementing the proposed change in working capital can be measured by the revenue/current assets ration. THis shows that no significant change has occurred as a result of implementing the proposed changes in working capital, as it has only changed from 1.2 times to 1.5times. This reflects that inventory and receivables have increased by broadly in line with the increase in sales.

Howeverm revenue/net working capital has changed from 7 to 4 times as a result of the decreased reliance on trade payables. This is a dramatic change in policy and may creat cash flow issues in future years if the company continues to grow as it represents a substantial increase in the capital required to support revenue.

Working  capital funding policy can be characterised as conservative, matching or aggressive, depending on the extent to which fluctuating current assets and permanent current assets are financed from short-term or long-term sources.