Scribd
Upload
7 views

Synops

The document discusses the importance of working capital management for businesses. Proper management of working capital aims to protect asset values and maximize investment returns. Efficient working capital management is crucial for smooth business operations. Inadequate attention to working capital can lead to misallocation of funds and is a leading cause of business failures. The objectives of the study are to analyze the composition, short-term solvency, financial efficiency, and profitability of a company's working capital over four years based on secondary data from annual reports.

Uploaded by

Thiru Venkat
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
7 views

Synops

The document discusses the importance of working capital management for businesses. Proper management of working capital aims to protect asset values and maximize investment returns. Efficient working capital management is crucial for smooth business operations. Inadequate attention to working capital can lead to misallocation of funds and is a leading cause of business failures. The objectives of the study are to analyze the composition, short-term solvency, financial efficiency, and profitability of a company's working capital over four years based on secondary data from annual reports.

Uploaded by

Thiru Venkat
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 3

AN OVERVIEW STUDY ABOUT WORKING CAPITAL MANAGEMENT Introduction

The management of working capital is becoming increasingly important as firms realize that approximately half of their investments arte in working capital. Some special characteristics of working capital like assets with short life span, its nearness to cash etc. further emphasize its importance from managerial view point.

Proper management of working capital aims at protecting the purchasing power of assets and maximizing the return on investment.

Efficient working capital management is very necessary for smooth operation of a concern. Management accounts should pay adequate attention to the management of working capital and its components both on assets as well as liability side.

Inadequate attention to working capital in effect, involves placing different values on different types of company funds. The inadequacy or mismanagement is one of the leading causes for business failure.

Management of working capital is of great help in planning the repayment of long term loans also. However, the liquidity of the firm depends upon the availability of cash so as to dispose off liabilities or bills at the time of their maturity.

OBJECTIVE OF THE STUDY


To study the composition of working capital employed in the company.

To analyze the short-term financial solvency of the company.

To analyze the financial efficiency of the company.

To ascertain the profitability of the company.

Limitation of the Study


 The study is mostly based on the companys annual report.

 Data taken for the study is of previous four years only. So, analysis is based on secondary data. So, analysis will suffer from all these deficiencies in the data.

You might also like