Volume : VI, Issue : X, October - 2017

A STUDY ON THE COMPOSITION OF WORKING CAPITAL: A CASE STUDY OF NESTLE INDIA LTD.

Dr. Binoy Arickal

Abstract :

 The term working capital refers to current assets which may be defined as those assets which is either in form of cash or which can be easily convertible in form of cash or equivalents within a period of one year and which is used to meet the day to day operations of the business.  The working capital ratio transforms the working capital calculation into a comparison between current assets and current liabilities .This also means the organisation has enough capital to work.  The working capital ratio helps in measuring the firm’s ability to pay off the current liabilities with their current assets . The suppliers & the creditors expects timely payments hence the working capital plays a very important role as current liabilities are best paid with current assets like cash or cash equivalents & marketable securities. The current assets can be easily converted into cash so more likely the short term  debts can be paid.

Better working capital ensures the success of the business where as if the working capital is not properly managed then that results to the downfall of the organization. The reason for having working capital arises due to the time gap between production & realization of cash from sales. The requiment of working capital varies from firm to firm and it depends upon the nature and type of the business that they carry. In this study we have tried to evaluate the Working capital position of Nestle India Ltd  for the years 2011–12 to 2015–16. The working capital position of Nestle India Ltd  has been analyzed on the basis of current ratio, quick ratio, absolute liquid ratio, working capital turnover ratio etc as well as the statement showing composition of current assets & current liabilities.

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Article: Download PDF   DOI : 10.36106/ijsr  

Cite This Article:

DR. BINOY ARICKAL, A STUDY ON THE COMPOSITION OF WORKING CAPITAL: A CASE STUDY OF NESTLE INDIA LTD., INTERNATIONAL JOURNAL OF SCIENTIFIC RESEARCH : Volume-6 | Issue-10 | October-2017

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