Structure of Working Capital in Sample Micro,  Small and Medium Enterprises in Kurnool District of  Andhra Pradesh

M. SREEDHAR; B. Ramachnadra Reddy

Volume : III, Issue : XII, December - 2013

Structure of Working Capital in Sample Micro, Small and Medium Enterprises in Kurnool District of Andhra Pradesh

M. Sreedhar, B. Ramachnadra Reddy

Abstract :

The analysis of the structure of working capital enables to understand the working capital condition in selected MSME units. The structure of working capital comprises both current assets and current liabilities. The components of current assets in the sample industries include inventory, short term investments, trade debtors, cash and bank balances and other such as advance payment to suppliers and prepaid expenses. The current liabilities constitute the short term bank loans, non– bank loans, trade creditors and others like outstanding wages and salaries, tax and advances from customers. Each component of current assets and current liabilities is expressed as a percentage of total assets and total liabilities respectively. Further, indices of current assets, current liabilities and net working capital are computed in order to examine the inter–relationships that exist among these financial variables. The universe for the study consists of 142 MSMEs registered in the five industrial estates of Kurnool district at the end of March, 2012. Because of non co–operation of some of the managements of MSMEs, the relevant data required for the present study could not be collected from 106 MSMEs. The remaining 36 MSMEs constitute the sample of the study. The sample units represent diverse industrial units such as agro based (12), mineral (8), plastic (6), chemical (3), engineering (3) and miscellaneous (4). In this paper an attempt has been made to study the working capital structure in MSME units in Kurnool District of Andhra Pradesh.