It is this management of such assets as well as liabilities which is described as working capital management. Working capital management is a quintessential part of financial management as a subject. It can also be compared with long-term decision-making the process as both of the domains deal with the analysis of risk and profitability. Working capital frequently changes its form and is sometimes also referred to as circulating capital.
The study revealed that the liquidity of this industry is not satisfactory. Anova, Liquidity, Working Capital. Its effective management can do much more for the success of the business, while ineffective management lead to letdown of organization. Working capital is defined as the amount of funds necessary to run day to day business operations of the firm.
It is that part of the total funds of business which is embarked for making custom obligations like payment of wages, raw materials etc. If current assets are less than current liabilities, an entity has a working capital deficiency, also called a working capital deficit.
A positive working capital cycle balances incoming and outgoing payments to minimize net working capital and maximize free cash flow.
If a firm is inefficient in managing working capital, it will not only reduce profitability but may also lead to financial crisis. Jain conducted a study among seven paper companies in India to analyze the basic components of working capital. The study revealed that the current ratio in public sector undertakings registered continuous decrease.
As far as the inventory was concerned, the study revealed that it was highly unplanned in public sector undertaking units as compared to private sector units.
The study contributed much in terms of realizing the importance of effective management of working capital. Sinha, sinha and singh conducted a study on the analysis of working capital management corporation of India and Gujarat state fertilizer corporation. The analysis revealed that a huge proportion funds was tied up as working capital, especially in inventories and receivables.
The study revealed that the sample companies failed to manage working capital efficiently by the usage of latest techniques, the funds were locked up at various levels during the course of business management.
The business needs to scrutinize the management of working capital constantly if it wants to maximize the profits. Thus, keeping the importance of working capital management in view, the present study aims to analyze: The average current ratios of sample companies do not differ significantly.
The average quick ratios of sample companies do not differ significantly. The average ratios of current assets to total assets of sample companies do not differ significantly.
The average ratios of current assets to sales of sample companies do not differ significantly. The average current assets turnovers of sample companies do not differ significantly. The average working capital turnover of sample companies do not differ significantly. The companies taken for the study purpose are: The data of five years from to required for the analysis part was collected from the Money control which is leading source of financial information.
The analysis part was carried out with the help of the variables: Ms excel software were used to derive the results. Thus, the discussions in terms of cross sectional comparison are as follows: The working capital structure of oil and gas industry is presented in table1.
Of all current assets across oil industry, as it can be observed in the Table 1, loans and advances alone constituted the highest percentage of The inventories constitution in all companies was higher than the aggregate percentage except in the case of GAIL the inventories were less than the industry aggregate.
As far as sundry debtors are concerned, GAIL had more percentage of sundry debtors than the industry aggregate. The current ratio of oil and gas industry of India is depicted in Table 2. The data in Table 2 reveals that except GAIL and Reliance all other companies could not maintain its current ratio above the industry average in any year.
The distribution of industry average current ratio reveals that both GAIL and Reliance had the healthiest current ratio throughout the study period compared to other companies.
However, the average current ratio of all sample companies was less than the set standard of current ratio i. The average current ratio of sample companies were compared using one-way ANOVA and were tested by the following hypothesis H The results are shown in table 3. The average current ratios of all five companies do not differ significantly.
The quick ratio of oil and gas industry is depicted in the Table 4. As presented in the Table 4, the mean quick ratio of oil and gas industry varied between the highest of 0.
The mean quick ratio of GAIL 1. It was more than the industries mean 0. The average quick ratio of Reliance 0. The average quick ratio of sample companies was compared by using one-way ANOVA and was tested by the following hypothesis H · WORKING CAPITAL MANAGEMENT PRACTICES REQUIRED The work in this thesis is original and has not been submitted in part or Working capital is the capital required to finance a firm’s day-to-day operational activities.
It can be defined as current (short-term) assets minus current (short-term) liabilities. srmvision.com Val's srmvision.com 5 These variables are: changes in net working capital, changes in cash flow risk, changes in capital expenditures, and a change in R&D expenses.
D.E.P. White (): The development of corporate cash holdings in the European Union Master Thesis srmvision.com?fid= Effects of Working Capital Management on Company Profitability A company can try to finance its working capital with short-term liabilities and shareholders’ equity, or it can depend on long-term financing.
This area will also be effects of working capital management. profitability. · A STUDY ON WORKING CAPITAL MANAGEMENT THROUGH RATIO ANALYSIS WITH REFERENCE TO KARNATAKA POWER CORPORATION LIMITED Srinivas K T Associate Professor, CIMS-B School, Jayanagar, Bangalore, india Email: [email protected] ABSTRACT Working capital is nerve system of any business.
Without proper srmvision.com&_Management/Dec13/pdf. · Working capital deals with the financial health of a company and it also plays important role in maximizing the shareholders wealth, hence, every company needs to sustain the balance between liquidity and srmvision.com Schedule thesis - Download as Excel Spreadsheet .xls /.xlsx), PDF File .pdf), Text File .txt) or read srmvision.com://srmvision.com