An Analysis of Working Capital Trend in Public Sector Telecom Companies in India (Bsnl & Mtnl)

RAJPUT VIJAY BHAI; MAHENDRA BHAI

Volume : IV, Issue : III, March - 2015

An Analysis of Working Capital Trend in Public Sector Telecom Companies in India (Bsnl & Mtnl)

Rajput Vijay Bhai, Mahendra Bhai

Abstract :

Working capital plays a significant role in improved profitability of firms. Firms can achieve optimal management of working capital by making the trade–off between profitability and liquidity. This paper analyzes trend of working capital over past 09 year of public sector telecom companies in India i.e. BSNL and MTNL. Working capital plays a very significant and vital role in the performance of a firm as it is required for day to day routine transaction. Every company should maintain sufficient level of working capital to avoid the problems such as illiquidity, bankruptcy etc. Therefore, the level of Working Capital must be properly determined and allocated to various segments, effectively controlled and regularly reviewed in order to have adequate and efficient flow of working capital. In this perspective, this paper analyzes working capital trend of public sector telecom companies. In this paper working capital trend analysis represents a picture of variations in current assets, current liabilities and working capital of Public Sector Telecom companies of India over a period of time. Trend Analysis is a tool of financial analysis where changes are compared to the base year, keeping the base year as 100. Such an analysis helps us to study upward / downward trends in current assets and current liabilities and its effect on working capital. This study will be helpful to the investors, government, financial analyst, various stake holder of the company and many other users of the financial information.