Volume : I, Issue : VI, November - 2012

Study and analysis of working capital management in current business scenario

Amit Kumar, Dr. Amit Sisodia

Abstract :

This paper is about to the various mode of working capital management. In current business scenario the role of working capital management is very crucial. Organization is more attentive for their working capital management. Working capital is a financial metric which represents the amount of day–by–day operating liquidity available to a business. Also known as operating capital, it is calculated as current assets minus current liabilities. A company can be endowed with assets and profitability, but short of liquidity, if these assets cannot readily be converted into cash. Gradual increase in profit results in capital growth of the firm. Increasing sales volume results in increasing profits. Sales are done on either cash or credit basis. Sale of goods will not be converted into cash immediately when sales are done on credit basis. Therefore additional capital is required to have uninterrupted business operations as the sales amount gets locked up in current assets like accounts receivable, inventory etc. Gradual increase in profit results in capital growth of the firm. Increasing sales volume results in increasing profits. Sales are done on either cash or credit basis. Sale of goods will not be converted into cash immediately when sales are done on credit basis. Therefore additional capital is required to have uninterrupted business operations as the sales amount gets locked up in current assets like accounts receivable, inventory etc

Keywords :

Article: Download PDF   DOI : 10.36106/ijsr  

Cite This Article:

Amit Kumar, Dr. Amit Sisodia Study and analysis of working capital management in current business scenario International Journal of Scientific Research, Vol.I, Issue.VI Nov 2012

Number of Downloads : 965

References :