A Study on Working Capital Management
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Date
2020-10-10T08:29:30Z
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Abstract
Working capital management is the process of identifying the financial strengths and
weakness of the firm. It is done by establishing relationships between the items of financial
statements viz., balance sheet and profit and loss account. Working capital management can
be undertaken by management of the firm, viz., owners, creditors, investors and others.Ratio Analysis is a powerful tool of working capital management. A ratio is defined as "the
indicated quotient of mathematical expression" and as "the relationship between two or more
things". A ratio is used as benchmark for evaluating the financial position and performance of
the firm. The relationship between two accounting figures, expressed mathematically, is
known as a financial ratio.
Ratio helps to summarizes large quantities of financial data and to make qualitative judgment
about the firm's financial performance. The persons interested in the analysis of financial
statements can be grouped under three head owners (or) investors who are desired primarily a
basis for estimating earning capacity. Creditors who are concerned primarily with Liquidity
and ability to pay interest and redeem loan within a specified period. Management is
interested in evolving analytical tools that will measure costs, efficiency, liquidity and
profitability with a view to make intelligent decisions.
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SAGAR P L, 1NZ18MBA72