Volume : VI, Issue : XI, November - 2017

Working Capital Management towards the Profitability of Emerging Private Sector Banks

Dr. P. N. Harikumar, Dr. Susha D

Abstract :

 Working capital management involves the relationship between a firm‘s short–term assets and its short–term liabilities. The goal of working capital management is to ensure that a firm is able to continue its operations and that it has sufficient ability to satisfy both maturing short–term debt and upcoming operational expenses. The management of working capital involves managing inventories, accounts receivable and payable, and cash. Working capital indicates the operating liquidity or financial strength of a business to meet the routine obligations. In financial term it is concerned with current assets and current liabilities those differences is called net working capital. Profitability and liquidity are considered to have a trade–off. Imbalance between these two can put the existence of the firm in danger either through the solvency or unprofitability. Status of working capital decides the effective utilization of long term assets which are the major source of earning. Hence working capital indirectly but significantly influences the profitability of a company. This paper is an endeavor to measure the impact working capital position on the profitability of new private sector banks of India by collecting data from published annual reports of banks over the period of five years (i.e. 2011–12 to 2015–16) which is secondary in nature. Analysis has been done through correlation and trend study.

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Article: Download PDF   DOI : 10.36106/ijsr  

Cite This Article:

Dr.P.N.Harikumar, Dr.Susha D, Working Capital Management towards the Profitability of Emerging Private Sector Banks, INTERNATIONAL JOURNAL OF SCIENTIFIC RESEARCH : Volume-6 | Issue-11 | November-2017

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