International Journal of Academic Research and Development

International Journal of Academic Research and Development


International Journal of Academic Research and Development
International Journal of Academic Research and Development
Vol. 4, Issue 1 (2019)

An analysis of working capital management


S Ramya, Atchaya J, Aardra Mariya Sam, Akalya S

Working capital management simply deals with short term financial necessities of Business enterprises. Working capital is appraised of both a company's operational efficiency and its short-term financial health. The study is based on secondary data in this research we will see the different working capital management practices and its impact of profitability for a period of 2013-2017. The data for this study is composed using the non-survey method. The tool used in the research is the working capital analysis of the business. Any business needs finance it inventories and debtors net of its payables. The proportions of the working capital components always vary in several stage of the trade cycle. The working capital management is decides how low the liquidity is to manage in order increase the profitability of the business, which will leads to the financing and investing decisions. Working capital analysis is one method of evaluating the credit worthiness of a business. By evaluating changes in a firm’s current assets or liabilities, an analyst can determine how much financing will be required to see a business through its normal cycle of operation. An important step in working capital analysis is to review changes in a firms net worth. A simple definition of net worth of liabilities is subtracted from assets. If net worth figure increases, a business should have more working capital. A lower net worth mean less working capital. If a company's current assets do not exceed its current liabilities, then it may have trouble paying back creditors or go bankrupt.
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