The document summarizes a research paper on efficient working capital management as a prerequisite for corporate survival and growth. It discusses how working capital, consisting of current assets like cash, accounts receivable, inventory, and current liabilities, must be efficiently managed for a company to continue operating and growing over time. The paper examines different aspects of working capital management, including reducing inventory levels, speeding up accounts receivable collections, and slowing payment terms for suppliers. It recommends that companies analyze factors like demand patterns and supplier lead times to optimize inventory and improve cash flow through better alignment of costs and customer payments.
Nwankwo, odi an empirical analysis of corporate survival and growth ijsaid ...William Kritsonis
This document summarizes a research paper on efficient working capital management and its importance for corporate survival and growth. The paper examines how working capital, including current assets and current liabilities, must be efficiently managed to ensure companies can meet daily financial obligations and remain competitive. Inefficient working capital management can lead to excess inventory, inability to pay bills on time, and idle cash. The paper recommends that financial managers understand sources of working capital and opportunities to temporarily invest idle funds. When companies efficiently manage working capital, they have greater chances of long-term profitability and liquidity.
Working Capital Management and Bank profitability in GhanaSamuel Agyei
This document examines the relationship between working capital management practices and profitability of banks in Ghana. It reviews previous empirical studies that have mostly found efficient working capital management, like reducing cash conversion cycles and accounts receivable periods, improves firm profitability. The study uses panel data and random effects techniques to analyze this relationship for Ghanaian banks. Preliminary findings contradict some prior studies by showing cash operating cycles and debtors collection periods positively relate to bank profitability, while creditors payment periods negatively relate to it. The study aims to inform bank managers and policymakers on effective working capital strategies.
This paper investigates the relationship between working capital management and financial performance of Pharmaceuticals and Textile firms listed at the Dhaka Securities Exchange in Bangladesh. The data analysis was carried on ten Pharmaceuticals and Textile firms for a period of 2013 to 2017. Secondary Data was analyzed by applying Descriptive Statistics, Regression and Correlation analysis to findthe relationship of current ratio, inventory conversion period and average payment period with Return on Asset. The findings indicate that the Pharmaceuticals and Textile firms’ performance is influenced by the variables relating to working capital. There is a positive relationship between profitability and current ratioand Inventory Turnover period shows a negative relationship with profitability but Average payment period shows insignificant impact on profitability. The study concludes that there exists a relationship between working capital managementand financial performance of Pharmaceuticals and Textile firms in Bangladesh. The study recommends that for the Pharmaceuticals and Textile firms to remain profitable, they should employ working capital management practice that will help in making decisions about investment mix and policy, matching investment to objective, asset allocation for institution and balancing risk against profitability.
This document summarizes a research paper that examines trends in working capital management and its impact on the performance of small manufacturing firms in Mauritius. It discusses how working capital management is important for business liquidity and profitability. The paper aims to analyze the relationship between working capital metrics like inventory days, receivables days, payables days, and cash conversion cycle on the profitability of 58 small manufacturing firms in Mauritius from 1998-2003. Specifically, it finds that higher investment in inventory and receivables is associated with lower profitability.
This document is a project report submitted by Jibin Babu to the Indian Institute of Planning and Management on working capital management at Lamiya Silks in Thrissur, Kerala from April to May 2012. It includes an acknowledgements section, table of contents, executive summary, and sections on the introduction to working capital, research methodology, company and industry overview, internship activities, assessment, conclusion, illustrations, and bibliography. The major purpose is to analyze Lamiya Silks' working capital management through evaluating annual reports and financial statements.
Working Capital Management and Cash Position of Banks in GhanaSamuel Agyei
This document summarizes a study on the relationship between working capital management and cash holdings of banks in Ghana. The study analyzed panel data from 10 Ghanaian banks from 1999-2008. The results showed that longer debtor collection periods, longer cash conversion cycles, higher capital structure, and larger bank size were significantly negatively related to bank cash positions. Meanwhile, longer creditor payment periods and higher profitability were significantly positively related to bank cash positions in Ghana. The document provides background on working capital management, cash holdings, and regulation of the Ghanaian banking sector. It also reviews theories and prior empirical research on factors influencing firm cash levels and working capital management.
Influence of Working Capital Management and Liquidity on Financial Soundness ...IOSR Journals
This particular study tries to assess the nature of relationship of Working Capital Management (WCM) and liquidity with firm’s performance. Most important issue for the firms is to decide the best suitable level of working capital which can satisfy both motives f liquidity and profitability. Financial performance is measured by return on capital employed while determinants of working capital and liquidity includes inventory turnover, accounts receivable turnover, current and quick ratio. A sample of 19 cement companies listed on Karachi Stock Exchange for a period of 2005 to 2010 has been taken out off 29 firms on the basis of availability of data. Finally outcomes of bivariate analysis suggested that efficient management of working capital and liquidity leads to financial success
Working capital management and cash holdings of banks in ghanaAlexander Decker
This document summarizes a study on the relationship between working capital management and cash holdings of banks in Ghana. The study analyzed panel data from 10 Ghanaian banks from 1999 to 2008. The results showed that longer debtor collection periods, longer cash conversion cycles, higher capital structure, and larger bank size were significantly negatively related to bank cash holdings. Meanwhile, longer creditor payment periods and higher profitability had a significantly positive relationship with bank cash holdings. The findings provide insights for bank managers and policymakers on how to effectively manage working capital to ensure adequate liquidity.
Nwankwo, odi an empirical analysis of corporate survival and growth ijsaid ...William Kritsonis
This document summarizes a research paper on efficient working capital management and its importance for corporate survival and growth. The paper examines how working capital, including current assets and current liabilities, must be efficiently managed to ensure companies can meet daily financial obligations and remain competitive. Inefficient working capital management can lead to excess inventory, inability to pay bills on time, and idle cash. The paper recommends that financial managers understand sources of working capital and opportunities to temporarily invest idle funds. When companies efficiently manage working capital, they have greater chances of long-term profitability and liquidity.
Working Capital Management and Bank profitability in GhanaSamuel Agyei
This document examines the relationship between working capital management practices and profitability of banks in Ghana. It reviews previous empirical studies that have mostly found efficient working capital management, like reducing cash conversion cycles and accounts receivable periods, improves firm profitability. The study uses panel data and random effects techniques to analyze this relationship for Ghanaian banks. Preliminary findings contradict some prior studies by showing cash operating cycles and debtors collection periods positively relate to bank profitability, while creditors payment periods negatively relate to it. The study aims to inform bank managers and policymakers on effective working capital strategies.
This paper investigates the relationship between working capital management and financial performance of Pharmaceuticals and Textile firms listed at the Dhaka Securities Exchange in Bangladesh. The data analysis was carried on ten Pharmaceuticals and Textile firms for a period of 2013 to 2017. Secondary Data was analyzed by applying Descriptive Statistics, Regression and Correlation analysis to findthe relationship of current ratio, inventory conversion period and average payment period with Return on Asset. The findings indicate that the Pharmaceuticals and Textile firms’ performance is influenced by the variables relating to working capital. There is a positive relationship between profitability and current ratioand Inventory Turnover period shows a negative relationship with profitability but Average payment period shows insignificant impact on profitability. The study concludes that there exists a relationship between working capital managementand financial performance of Pharmaceuticals and Textile firms in Bangladesh. The study recommends that for the Pharmaceuticals and Textile firms to remain profitable, they should employ working capital management practice that will help in making decisions about investment mix and policy, matching investment to objective, asset allocation for institution and balancing risk against profitability.
This document summarizes a research paper that examines trends in working capital management and its impact on the performance of small manufacturing firms in Mauritius. It discusses how working capital management is important for business liquidity and profitability. The paper aims to analyze the relationship between working capital metrics like inventory days, receivables days, payables days, and cash conversion cycle on the profitability of 58 small manufacturing firms in Mauritius from 1998-2003. Specifically, it finds that higher investment in inventory and receivables is associated with lower profitability.
This document is a project report submitted by Jibin Babu to the Indian Institute of Planning and Management on working capital management at Lamiya Silks in Thrissur, Kerala from April to May 2012. It includes an acknowledgements section, table of contents, executive summary, and sections on the introduction to working capital, research methodology, company and industry overview, internship activities, assessment, conclusion, illustrations, and bibliography. The major purpose is to analyze Lamiya Silks' working capital management through evaluating annual reports and financial statements.
Working Capital Management and Cash Position of Banks in GhanaSamuel Agyei
This document summarizes a study on the relationship between working capital management and cash holdings of banks in Ghana. The study analyzed panel data from 10 Ghanaian banks from 1999-2008. The results showed that longer debtor collection periods, longer cash conversion cycles, higher capital structure, and larger bank size were significantly negatively related to bank cash positions. Meanwhile, longer creditor payment periods and higher profitability were significantly positively related to bank cash positions in Ghana. The document provides background on working capital management, cash holdings, and regulation of the Ghanaian banking sector. It also reviews theories and prior empirical research on factors influencing firm cash levels and working capital management.
Influence of Working Capital Management and Liquidity on Financial Soundness ...IOSR Journals
This particular study tries to assess the nature of relationship of Working Capital Management (WCM) and liquidity with firm’s performance. Most important issue for the firms is to decide the best suitable level of working capital which can satisfy both motives f liquidity and profitability. Financial performance is measured by return on capital employed while determinants of working capital and liquidity includes inventory turnover, accounts receivable turnover, current and quick ratio. A sample of 19 cement companies listed on Karachi Stock Exchange for a period of 2005 to 2010 has been taken out off 29 firms on the basis of availability of data. Finally outcomes of bivariate analysis suggested that efficient management of working capital and liquidity leads to financial success
Working capital management and cash holdings of banks in ghanaAlexander Decker
This document summarizes a study on the relationship between working capital management and cash holdings of banks in Ghana. The study analyzed panel data from 10 Ghanaian banks from 1999 to 2008. The results showed that longer debtor collection periods, longer cash conversion cycles, higher capital structure, and larger bank size were significantly negatively related to bank cash holdings. Meanwhile, longer creditor payment periods and higher profitability had a significantly positive relationship with bank cash holdings. The findings provide insights for bank managers and policymakers on how to effectively manage working capital to ensure adequate liquidity.
Determinants of working capital management efficiencyAlexander Decker
This document summarizes a research study that examines the determinants of working capital management efficiency for automotive and engineering firms listed on the Karachi Stock Exchange in Pakistan. The study uses cash conversion cycle, days sales inventory, days payable outstanding, and days sales outstanding as explanatory variables to analyze quarterly panel data from 9 firms over 5 years. It also administers a questionnaire on Enterprise Resource Planning (ERP) systems. The study aims to determine the efficient factors of working capital management for these firms and investigate the relationships between working capital components and independent variables. It concludes that keeping the cash conversion cycle shortest through tight collection policies and liberal payment terms, along with efficient inventory management, can help firms keep working capital efficient.
WORKING CAPITAL MANAGEMENT OF TATA STEELVIVEK SHARMA
This document is a project report submitted by Vivek Kumar Sharma to Rashtrasant Tukdoji Maharaj Nagpur University in partial fulfillment of the requirements for a Bachelor of Business Administration degree. The report focuses on working capital management at Tata Steel Ltd and includes an introduction, company profile of Tata Steel, research methodology, objectives and scope, findings and interpretation, limitations, conclusion, bibliography, and annexure. It provides an overview of Tata Steel's history, acquisitions, products, subsidiaries, and facilities.
An Empirical Analysis on the Nature of Relationship between Capital Structure...iosrjce
The financing decision with regard to capital structure theory of finance has been a topic of many
theories and their conflicting output for past many years. This paper aims to analyse the nature of relationship
between the capital structure of a firm and its performance. The data of 40 firms excluding financial services
firms listed on Nifty indices on National Stock Exchange is studied (The composition of 50 firms on Nifty
represents a well branch out index reflecting precisely the overall market conditions). Financial services firms
have been excluded from purview of this paper, as they are in the business of collecting money and investing in
financial assets rather than producing goods, hence follow a unique business valuation model. Further financial
services sector being one of the most sensitive sectors. This paper analyzes a period of 13 years (2001-2014)
covering the phases of a business cycle starting from boom (2001/02-2006/07), recession (2007/08-2008/09)
and then recovery (2009/10-2013/14). The complete business cycle will aid to demonstrate the results more
accurately. This paper also surveys the topical developments in the empirical capital structure research. The
data for a period of 13 years is analysed using descriptive statistics, correlation and multiple regression
techniques. For research purpose, the ratios such as debt-equity ratio, debt-asset ratio and long term debt are
taken as independent variables whereas Net Profit, Net Profit Margin, ROCE, ROE and ROA are the ratios
taken as dependent variables.
The main objective of this paper such as the Karachi Stock Exchange market development working capital management (WCM) on firm performance is to determine the impact. In this paper the chemical industry for the period 2009-2014 to 6 years for a sample of 22 firms Karachi Stock Exchange (KSE) working capital management and firm performance of different variables used for analysis . Working Capital Management to measure the variables that were used in this study are the number of recovery days , days in inventory and size , leverage , inventory , equity , sales and gross domestic product (GDP) numbers are control variables. Firm performance measure used in this study for the dependent variable is the return on assets. Firm size is positively affected by the firm’s profits. Firms whose profits are high, their working capital firms are not interested in management and firm performance. The result of the study and working capital is negative relationship between firm performance shows. Is a positive relationship between size and profitability? Firm size is increased or decreased profit increased or decreased respectively. Moreover, profits and principles that support the pecking order used by firms are negative relationship between debts.
Determinants of Cash holding in German MarketIOSR Journals
Cash is usually known as the blood of any business entity that is why it is very important policy matter in the modern corporate financial decision and policy matters. An appropriate level of cash is required within the firm for the good and smooth operations of any sort of business entity. This research report investigates the determinants of cash holding in non-financial firms of Germany across different firm sizes and industries. Furthermore the data set for the period of 2000 to 2010 for the firm size, log of total assets, EBIT, Capital expenditure percentage of sales, working capital, liquidity (current ratio), and leverage has been taken to study the impact of these on level of corporate cash holdings. It is shown that cash holdings must be analysed from a dynamic point of view: A strong empirical support was found for the hypothesis of implicit cash targets. Financial determinants influence the corporate cash holdings, but it’s not clear which model, the transaction cost model or the managerial opportunism, thesis supports best the empirical findings. The findings of this study are consistent with the predictions of the trade-off theory, pecking order theory, and agency cost theory. The result gave strong evidence that firm size, working capital, and leverage significantly affect the cash holdings decisions of non-financial firms and that are in conformity with the existing literature on the determinants of corporate cash holdings
Working capital is the amount of a company's current assets minus the amount of its current liabilities.
The overall success of the company depends upon its working capital position. So it should be handled properly because it shows the efficiency & financial strength of a company.
This document discusses a study on working capital management practices of small scale enterprises in Ghana's Central Region. The study found that 38% of small businesses received an average of 2 weeks to 1 month of credit from suppliers. Small businesses provided credit periods of less than 1 month to 60 days to customers. The main challenges with customer credit were late payments and bad debts. Half of businesses used notebooks for inventory tracking while 57% had business bank accounts. Personal savings made up 60% of startup capital on average. The document recommends increased collaboration between business advisory centers and small business associations to improve financial training as well as expanded record keeping support.
1. The document is a student's project report on the financial ratio analysis of Wipro. It includes an acknowledgment section thanking various professors and institutions for their support and guidance.
2. There is a declaration by the student stating that the project is their original work and submitted for their Master's degree program.
3. The project contains a certificate from the student's teacher guide confirming they completed the research project on the given topic under their guidance.
INTERNAL Assign no 4 ( JAIPUR INTERNAL UNI)Partha_bappa
This document discusses various topics related to human resource management. It differentiates between HRM and HRD, defining HRM as dealing with all aspects of human resources including recruitment and rewards, while HRD only focuses on development. It defines job specification and lists some common causes of grievances in organizations such as poor working conditions, attitudes of supervisors, and economic factors like wages. It also discusses human resource inventory, listing the types of records that can be used, and lists some benefits of training such as keeping employees motivated and cost-effectiveness. Finally, it discusses various internal and external sources of recruitment and their merits and demerits.
Working capital analysis in rajasthan financial corporationTapasya123
Working Capital management is concerned with the problems that arise
in attempting to manage current assets, current liabilities and
interrelationship that exists in between them. The success of an
organisation to a greater extent depends upon the effective management
of working capital. It guarantees financial soundness of organisation and
therefore keeps it away from sickness zone. This study is a modest attempt
in this direction by undertaking a study of working capital management.
Through present study researcher has tried to examine sources used by
Rajasthan Financial Corporation to finance their working capital
requirements and to analyse and evaluate working capital management.
The paper has also examined the liquidity position of Rajasthan Financial
Corporation. In order to examine and analyse, financial statements of
Rajasthan Financial Corporation are collected for the period of five years
from 2009- 2014 and ratio analysis was conducted and analysed to check
the working capital conditions of Rajasthan Financial Corporation.
This document summarizes a study that examined the effect of assets management on the profitability of selected quoted firms in Nigeria from 2007 to 2016. Specifically, it analyzed the effect of current assets, non-current assets, and debt-equity ratio on profit after tax. Data were collected from the annual reports of 10 quoted firms and analyzed using panel estimation techniques. The results revealed that current assets had an insignificant positive effect on profit after tax, while non-current assets had a significant positive effect. Debt-equity ratio had an insignificant negative effect on profit after tax. The study concluded that assets management contributes meaningfully to improved firm performance, especially when measured by profit after tax.
Ratio analysis involves evaluating a company's performance and financial health by comparing financial data over time and against industry benchmarks. There are several types of ratios that provide different insights. Liquidity ratios like the current ratio measure a company's ability to pay short-term debts, with a higher ratio indicating better coverage of current liabilities. Profitability ratios like return on assets indicate how efficiently a company generates profits relative to its assets, with a higher ratio generally being preferable. Ratio analysis is a key tool for fundamental analysis of a company's financial strength and operating efficiency.
Finance is the lifeblood and lifeline of any business entity either commercial or non-commercial. The
Survival, Stability and Sustainability of a firm is highly associated with its financial wellness. It can be observed through its ability to pay(re) short-term as well as long term liabilities, meeting the regular financial obligations, to increase the value of firm and ability to generate profit. Financial analysis, evaluation, and assessment help in determines the financial position and financial strength of a firm. Among the plenty of methods and tolls available for financial performance, ratio analysis is more useful and meaningful. These ratios make it possible to analyze the evolution of the financial situation of a firm (trend analysis), cross-sectional analysis and comparative analysis.
Working Capital management is concerned with the problems that arise
in attempting to manage current assets, current liabilities and
interrelationship that exists in between them. The success of an
organisation to a greater extent depends upon the effective management
of working capital. It guarantees financial soundness of organisation and
therefore keeps it away from sickness zone. This study is a modest attempt
in this direction by undertaking a study of working capital management.
Through present study researcher has tried to examine sources used by
Rajasthan Financial Corporation to finance their working capital
requirements and to analyse and evaluate working capital management.
The paper has also examined the liquidity position of Rajasthan Financial
Corporation. In order to examine and analyse, financial statements of
Rajasthan Financial Corporation are collected for the period of five years
from 2009- 2014 and ratio analysis was conducted and analysed to check
the working capital conditions of Rajasthan Financial Corporation.
Keywords: Ratio Analysis, Liquidity, Investment,
The Miller-Orr model of cash management allows businesses to set upper and lower cash balance limits and determine a target cash balance point. It accounts for stochastic cash inflows and outflows. The key assumptions are random daily cash balances, ability to invest idle cash, and transaction fees for buying/selling securities.
Money markets deal with short-term financial assets up to one year. Transactions typically occur through phone without brokers. Participants include central banks, commercial banks, and non-bank financial institutions.
International finance management helps determine exchange rates, assess foreign debt securities and inflation rates, compare countries' economic statuses, and identify foreign market opportunities. Exchange rates strongly influence international finance calculations.
There is a consistent relationship
Writekraft Research and Publications LLP was initially formed, informally, in 2006 by a group of scholars to help fellow students. Gradually, with several dissertations, thesis and assignments receiving acclaim and a good grade, Writekraft was officially founded in 2011 . Since its establishment, Writekraft Research & Publications LLP is Guiding and Mentoring PhD Scholars.
Our Mission
“To provide breakthrough research works to our clients through Perseverant efforts towards creativity and innovation”.
Vision
Writekraft endeavours to be the leading global research and publications company that will fulfil all research needs of our clients. We will achieve this vision through:
Analyzing every customer’s aims, objectives and purpose of research
Using advanced and latest tools and technique of research and analysis
Coordinating and including their own ideas and knowledge
Providing the desired inferences and results of the research
In the past decade, we have successfully assisted students from various universities in India and globally. We at Writekraft Research & Publications LLP head office in Kanpur, India are most trusted and professional Research, Writing, Guidance and Publication Service Provider for PhD. Our services meet all your PhD Admissions, Thesis Preparation and Research Paper Publication needs with highest regards for the quality you prefer.
This document summarizes a research study that examined the relationship between working capital management and financial performance of deposit money banks in Nigeria from 2007 to 2013. The study found a strong positive relationship between current ratio, quick ratio, and return on assets (ROA), while cash ratio was found to be inversely related to ROA. It recommends that banks maintain adequate liquidity through higher current and quick ratios to improve profitability, while reducing the amount of cash held to invest funds and generate higher returns. In general, the study empirically proved that effective working capital management can positively impact the profitability of deposit money banks in Nigeria.
This document provides an acknowledgment and summary of a project report on working capital management at Jai Bharat Maruti Ltd. in Manesar, India. The 6-week project involved interviewing executives, collecting and analyzing company data. Key findings included acid test and current ratios below industry standards, high and increasing debtors, and increasing working capital needs. The author thanks those involved in the project, including the director, project guide, and HR officer for the learning opportunity.
Effect of working capital on profitability in indian markets and concept of z...mvkdel
This document provides an analysis of the relationship between working capital management and profitability for Indian companies from 2005-2010. It discusses key concepts around working capital, including how it refers to current assets and liabilities required for short-term financing. Prior research has shown that both excessive and low levels of working capital can negatively impact profitability. The document reviews literature on working capital management and profitability relationships. It aims to contribute to understanding how working capital management impacts profitability to help managers make decisions that create shareholder value, especially in emerging markets like India.
This document is a project report submitted by Jibin Babu to the Indian Institute of Planning and Management on working capital management at Lamiya Silks in Thrissur, Kerala from April to May 2012. It includes an acknowledgements section, table of contents, executive summary, and sections on the introduction to working capital, research methodology, company and industry overview, internship activities, assessment, conclusion, illustrations, and bibliography. The major purpose is to analyze Lamiya Silks' working capital management through evaluating annual reports and financial statements.
This document summarizes a research study that examined the relationship between working capital management and profitability for non-listed firms in Ghana from 2004-2009. The study used cash conversion cycles and its components (days of receivables, days of inventory, and days of payables) as measures of working capital management. Gross operating profit to total assets was used as the measure of firm performance. The results showed that profitability was negatively related to the length of the cash conversion cycle. Specifically, performance was positively affected by reducing days of receivables and days of inventory. Additionally, firm size, GDP growth, and sales growth positively impacted performance. The study suggests that managers in emerging markets should focus on effective working capital management to improve
Determinants of working capital management efficiencyAlexander Decker
This document summarizes a research study that examines the determinants of working capital management efficiency for automotive and engineering firms listed on the Karachi Stock Exchange in Pakistan. The study uses cash conversion cycle, days sales inventory, days payable outstanding, and days sales outstanding as explanatory variables to analyze quarterly panel data from 9 firms over 5 years. It also administers a questionnaire on Enterprise Resource Planning (ERP) systems. The study aims to determine the efficient factors of working capital management for these firms and investigate the relationships between working capital components and independent variables. It concludes that keeping the cash conversion cycle shortest through tight collection policies and liberal payment terms, along with efficient inventory management, can help firms keep working capital efficient.
WORKING CAPITAL MANAGEMENT OF TATA STEELVIVEK SHARMA
This document is a project report submitted by Vivek Kumar Sharma to Rashtrasant Tukdoji Maharaj Nagpur University in partial fulfillment of the requirements for a Bachelor of Business Administration degree. The report focuses on working capital management at Tata Steel Ltd and includes an introduction, company profile of Tata Steel, research methodology, objectives and scope, findings and interpretation, limitations, conclusion, bibliography, and annexure. It provides an overview of Tata Steel's history, acquisitions, products, subsidiaries, and facilities.
An Empirical Analysis on the Nature of Relationship between Capital Structure...iosrjce
The financing decision with regard to capital structure theory of finance has been a topic of many
theories and their conflicting output for past many years. This paper aims to analyse the nature of relationship
between the capital structure of a firm and its performance. The data of 40 firms excluding financial services
firms listed on Nifty indices on National Stock Exchange is studied (The composition of 50 firms on Nifty
represents a well branch out index reflecting precisely the overall market conditions). Financial services firms
have been excluded from purview of this paper, as they are in the business of collecting money and investing in
financial assets rather than producing goods, hence follow a unique business valuation model. Further financial
services sector being one of the most sensitive sectors. This paper analyzes a period of 13 years (2001-2014)
covering the phases of a business cycle starting from boom (2001/02-2006/07), recession (2007/08-2008/09)
and then recovery (2009/10-2013/14). The complete business cycle will aid to demonstrate the results more
accurately. This paper also surveys the topical developments in the empirical capital structure research. The
data for a period of 13 years is analysed using descriptive statistics, correlation and multiple regression
techniques. For research purpose, the ratios such as debt-equity ratio, debt-asset ratio and long term debt are
taken as independent variables whereas Net Profit, Net Profit Margin, ROCE, ROE and ROA are the ratios
taken as dependent variables.
The main objective of this paper such as the Karachi Stock Exchange market development working capital management (WCM) on firm performance is to determine the impact. In this paper the chemical industry for the period 2009-2014 to 6 years for a sample of 22 firms Karachi Stock Exchange (KSE) working capital management and firm performance of different variables used for analysis . Working Capital Management to measure the variables that were used in this study are the number of recovery days , days in inventory and size , leverage , inventory , equity , sales and gross domestic product (GDP) numbers are control variables. Firm performance measure used in this study for the dependent variable is the return on assets. Firm size is positively affected by the firm’s profits. Firms whose profits are high, their working capital firms are not interested in management and firm performance. The result of the study and working capital is negative relationship between firm performance shows. Is a positive relationship between size and profitability? Firm size is increased or decreased profit increased or decreased respectively. Moreover, profits and principles that support the pecking order used by firms are negative relationship between debts.
Determinants of Cash holding in German MarketIOSR Journals
Cash is usually known as the blood of any business entity that is why it is very important policy matter in the modern corporate financial decision and policy matters. An appropriate level of cash is required within the firm for the good and smooth operations of any sort of business entity. This research report investigates the determinants of cash holding in non-financial firms of Germany across different firm sizes and industries. Furthermore the data set for the period of 2000 to 2010 for the firm size, log of total assets, EBIT, Capital expenditure percentage of sales, working capital, liquidity (current ratio), and leverage has been taken to study the impact of these on level of corporate cash holdings. It is shown that cash holdings must be analysed from a dynamic point of view: A strong empirical support was found for the hypothesis of implicit cash targets. Financial determinants influence the corporate cash holdings, but it’s not clear which model, the transaction cost model or the managerial opportunism, thesis supports best the empirical findings. The findings of this study are consistent with the predictions of the trade-off theory, pecking order theory, and agency cost theory. The result gave strong evidence that firm size, working capital, and leverage significantly affect the cash holdings decisions of non-financial firms and that are in conformity with the existing literature on the determinants of corporate cash holdings
Working capital is the amount of a company's current assets minus the amount of its current liabilities.
The overall success of the company depends upon its working capital position. So it should be handled properly because it shows the efficiency & financial strength of a company.
This document discusses a study on working capital management practices of small scale enterprises in Ghana's Central Region. The study found that 38% of small businesses received an average of 2 weeks to 1 month of credit from suppliers. Small businesses provided credit periods of less than 1 month to 60 days to customers. The main challenges with customer credit were late payments and bad debts. Half of businesses used notebooks for inventory tracking while 57% had business bank accounts. Personal savings made up 60% of startup capital on average. The document recommends increased collaboration between business advisory centers and small business associations to improve financial training as well as expanded record keeping support.
1. The document is a student's project report on the financial ratio analysis of Wipro. It includes an acknowledgment section thanking various professors and institutions for their support and guidance.
2. There is a declaration by the student stating that the project is their original work and submitted for their Master's degree program.
3. The project contains a certificate from the student's teacher guide confirming they completed the research project on the given topic under their guidance.
INTERNAL Assign no 4 ( JAIPUR INTERNAL UNI)Partha_bappa
This document discusses various topics related to human resource management. It differentiates between HRM and HRD, defining HRM as dealing with all aspects of human resources including recruitment and rewards, while HRD only focuses on development. It defines job specification and lists some common causes of grievances in organizations such as poor working conditions, attitudes of supervisors, and economic factors like wages. It also discusses human resource inventory, listing the types of records that can be used, and lists some benefits of training such as keeping employees motivated and cost-effectiveness. Finally, it discusses various internal and external sources of recruitment and their merits and demerits.
Working capital analysis in rajasthan financial corporationTapasya123
Working Capital management is concerned with the problems that arise
in attempting to manage current assets, current liabilities and
interrelationship that exists in between them. The success of an
organisation to a greater extent depends upon the effective management
of working capital. It guarantees financial soundness of organisation and
therefore keeps it away from sickness zone. This study is a modest attempt
in this direction by undertaking a study of working capital management.
Through present study researcher has tried to examine sources used by
Rajasthan Financial Corporation to finance their working capital
requirements and to analyse and evaluate working capital management.
The paper has also examined the liquidity position of Rajasthan Financial
Corporation. In order to examine and analyse, financial statements of
Rajasthan Financial Corporation are collected for the period of five years
from 2009- 2014 and ratio analysis was conducted and analysed to check
the working capital conditions of Rajasthan Financial Corporation.
This document summarizes a study that examined the effect of assets management on the profitability of selected quoted firms in Nigeria from 2007 to 2016. Specifically, it analyzed the effect of current assets, non-current assets, and debt-equity ratio on profit after tax. Data were collected from the annual reports of 10 quoted firms and analyzed using panel estimation techniques. The results revealed that current assets had an insignificant positive effect on profit after tax, while non-current assets had a significant positive effect. Debt-equity ratio had an insignificant negative effect on profit after tax. The study concluded that assets management contributes meaningfully to improved firm performance, especially when measured by profit after tax.
Ratio analysis involves evaluating a company's performance and financial health by comparing financial data over time and against industry benchmarks. There are several types of ratios that provide different insights. Liquidity ratios like the current ratio measure a company's ability to pay short-term debts, with a higher ratio indicating better coverage of current liabilities. Profitability ratios like return on assets indicate how efficiently a company generates profits relative to its assets, with a higher ratio generally being preferable. Ratio analysis is a key tool for fundamental analysis of a company's financial strength and operating efficiency.
Finance is the lifeblood and lifeline of any business entity either commercial or non-commercial. The
Survival, Stability and Sustainability of a firm is highly associated with its financial wellness. It can be observed through its ability to pay(re) short-term as well as long term liabilities, meeting the regular financial obligations, to increase the value of firm and ability to generate profit. Financial analysis, evaluation, and assessment help in determines the financial position and financial strength of a firm. Among the plenty of methods and tolls available for financial performance, ratio analysis is more useful and meaningful. These ratios make it possible to analyze the evolution of the financial situation of a firm (trend analysis), cross-sectional analysis and comparative analysis.
Working Capital management is concerned with the problems that arise
in attempting to manage current assets, current liabilities and
interrelationship that exists in between them. The success of an
organisation to a greater extent depends upon the effective management
of working capital. It guarantees financial soundness of organisation and
therefore keeps it away from sickness zone. This study is a modest attempt
in this direction by undertaking a study of working capital management.
Through present study researcher has tried to examine sources used by
Rajasthan Financial Corporation to finance their working capital
requirements and to analyse and evaluate working capital management.
The paper has also examined the liquidity position of Rajasthan Financial
Corporation. In order to examine and analyse, financial statements of
Rajasthan Financial Corporation are collected for the period of five years
from 2009- 2014 and ratio analysis was conducted and analysed to check
the working capital conditions of Rajasthan Financial Corporation.
Keywords: Ratio Analysis, Liquidity, Investment,
The Miller-Orr model of cash management allows businesses to set upper and lower cash balance limits and determine a target cash balance point. It accounts for stochastic cash inflows and outflows. The key assumptions are random daily cash balances, ability to invest idle cash, and transaction fees for buying/selling securities.
Money markets deal with short-term financial assets up to one year. Transactions typically occur through phone without brokers. Participants include central banks, commercial banks, and non-bank financial institutions.
International finance management helps determine exchange rates, assess foreign debt securities and inflation rates, compare countries' economic statuses, and identify foreign market opportunities. Exchange rates strongly influence international finance calculations.
There is a consistent relationship
Writekraft Research and Publications LLP was initially formed, informally, in 2006 by a group of scholars to help fellow students. Gradually, with several dissertations, thesis and assignments receiving acclaim and a good grade, Writekraft was officially founded in 2011 . Since its establishment, Writekraft Research & Publications LLP is Guiding and Mentoring PhD Scholars.
Our Mission
“To provide breakthrough research works to our clients through Perseverant efforts towards creativity and innovation”.
Vision
Writekraft endeavours to be the leading global research and publications company that will fulfil all research needs of our clients. We will achieve this vision through:
Analyzing every customer’s aims, objectives and purpose of research
Using advanced and latest tools and technique of research and analysis
Coordinating and including their own ideas and knowledge
Providing the desired inferences and results of the research
In the past decade, we have successfully assisted students from various universities in India and globally. We at Writekraft Research & Publications LLP head office in Kanpur, India are most trusted and professional Research, Writing, Guidance and Publication Service Provider for PhD. Our services meet all your PhD Admissions, Thesis Preparation and Research Paper Publication needs with highest regards for the quality you prefer.
This document summarizes a research study that examined the relationship between working capital management and financial performance of deposit money banks in Nigeria from 2007 to 2013. The study found a strong positive relationship between current ratio, quick ratio, and return on assets (ROA), while cash ratio was found to be inversely related to ROA. It recommends that banks maintain adequate liquidity through higher current and quick ratios to improve profitability, while reducing the amount of cash held to invest funds and generate higher returns. In general, the study empirically proved that effective working capital management can positively impact the profitability of deposit money banks in Nigeria.
This document provides an acknowledgment and summary of a project report on working capital management at Jai Bharat Maruti Ltd. in Manesar, India. The 6-week project involved interviewing executives, collecting and analyzing company data. Key findings included acid test and current ratios below industry standards, high and increasing debtors, and increasing working capital needs. The author thanks those involved in the project, including the director, project guide, and HR officer for the learning opportunity.
Effect of working capital on profitability in indian markets and concept of z...mvkdel
This document provides an analysis of the relationship between working capital management and profitability for Indian companies from 2005-2010. It discusses key concepts around working capital, including how it refers to current assets and liabilities required for short-term financing. Prior research has shown that both excessive and low levels of working capital can negatively impact profitability. The document reviews literature on working capital management and profitability relationships. It aims to contribute to understanding how working capital management impacts profitability to help managers make decisions that create shareholder value, especially in emerging markets like India.
This document is a project report submitted by Jibin Babu to the Indian Institute of Planning and Management on working capital management at Lamiya Silks in Thrissur, Kerala from April to May 2012. It includes an acknowledgements section, table of contents, executive summary, and sections on the introduction to working capital, research methodology, company and industry overview, internship activities, assessment, conclusion, illustrations, and bibliography. The major purpose is to analyze Lamiya Silks' working capital management through evaluating annual reports and financial statements.
This document summarizes a research study that examined the relationship between working capital management and profitability for non-listed firms in Ghana from 2004-2009. The study used cash conversion cycles and its components (days of receivables, days of inventory, and days of payables) as measures of working capital management. Gross operating profit to total assets was used as the measure of firm performance. The results showed that profitability was negatively related to the length of the cash conversion cycle. Specifically, performance was positively affected by reducing days of receivables and days of inventory. Additionally, firm size, GDP growth, and sales growth positively impacted performance. The study suggests that managers in emerging markets should focus on effective working capital management to improve
This document provides an abstract for a study on working capital management at Integral Coach Factory in Chennai. It defines key terms like working capital, current assets, current liabilities, and discusses the concepts of gross working capital and net working capital. The objectives of the study are to analyze trends in working capital, examine liquidity and profitability, and offer suggestions. Statistical tools like ratio analysis will be used to test hypotheses about the relationship between liquidity and profitability, and factors influencing working capital.
This document analyzes the relationship between working capital, liquidity, profitability, and solvency of ACC Limited, an Indian cement company, from 2000-2010. It finds that despite having negative working capital for most of the period, ACC was able to earn good returns through an aggressive working capital policy, but that this ultimately put its solvency at risk. The study uses various financial ratios and tests to evaluate ACC's liquidity, profitability, and risk over time.
Application of capital structure in creating valueAlexander Decker
This document discusses the application of capital structure in creating value and growth for firms in Nigeria. It begins with an abstract that outlines the challenges firms face in maximizing profits and dealing with global economic insecurity. The study examined how effective capital structure and value creation can stimulate firm growth. Questionnaires were used to collect data, which was analyzed using statistical tools. The results showed that judicious use of capital financing is significant in value creation and growth. The document recommends stakeholders provide security through partnerships to guarantee investment safety and long-term corporate value enhancement. The introduction discusses how capital structure influences shareholder returns and risk through impacting debt-equity mix, cost of capital, and firm value. Capital structure is an important managerial decision that
This document outlines the background, problem statement, objectives, hypothesis, and methodology for a study on working capital management at Arabian Industries LLC. Specifically:
1) The background provides context on working capital and its importance for business operations and financial health.
2) The problem statement identifies key issues like determining optimal levels of working capital components and financing sources.
3) The objectives are to maintain appropriate working capital levels and availability of funds, as well as ensure working capital does not negatively impact profitability.
4) The hypothesis is that working capital helps business goodwill and creates an environment of security, confidence, and efficiency.
5) The methodology will involve understanding working capital concepts, components,
This document summarizes a research report on the relationship between working capital management and profitability. The report analyzes data from 60 Pakistani textile companies over 2001-2006. The results show a statistically significant negative relationship between profitability (measured by return on assets) and the number of days accounts receivable, inventory, and accounts payable are outstanding. Proper management of working capital through optimizing current assets and liabilities can thus improve company profits. The report also acknowledges the importance of balancing liquidity and profitability in working capital management.
Management of working capital and expense analysis of nalcoRabinarayan1991
This document provides certificates from the organization and faculty guide for a project report submitted by Rabinarayan Sahoo on working capital management and expense analysis at National Aluminium Company Limited (NALCO). It includes declarations from the student and acknowledges those who provided assistance. The executive summary indicates the report aims to understand NALCO's liquidity position, working capital utilization, and evaluate various working capital management practices. It also provides an introduction to NALCO and the aluminum industry.
Contribution of Current Assets Management to the Financial Performance of Lis...ijtsrd
The study examined the effect of current asset management on the financial performance of listed consumer goods firms in Nigeria. The study specifically determined the extent to which debtor turnover ratio, cash ratio and inventory turnover ratio affect the Earnings Per Share of listed consumer goods firms on the Nigerian Exchange Group, using causal comparative research design. Purposive sampling technique was deployed to determine the twelve 12 consumer goods firms that made up the sample participants of the study, out of a population of twenty one. Secondary data were obtained from the annual reports and accounts of the selected companies over a period of ten years which spanned from 2011 to 2020. The hypotheses formulated were tested using Ordinary Least Square technique at 5 level of significance. The findings revealed that while debtor turnover ratio and inventory turnover ratio have a positive effect on earnings per share, cash ratio negatively affects the Earnings Per Share of listed consumer goods firms on the Nigerian Exchange Group. However, the effects were not significant at 5 level. It was recommended that managers of consumer goods firms should reduce to minimal level the time it will take between sales of goods and services and the collection of cash since the performance of firms can be increased through an increment in frequency of debt collection. Gilbert Ogechukwu Nworie | Vitalis O. Moedu | Onyali, Chidiebele Innocent "Contribution of Current Assets Management to the Financial Performance of Listed Consumer Goods Firms in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-1 , February 2023, URL: https://www.ijtsrd.com/papers/ijtsrd52600.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/52600/contribution-of-current-assets-management-to-the-financial-performance-of-listed-consumer-goods-firms-in-nigeria/gilbert-ogechukwu-nworie
Working Capital Management and the Financial Performance of Basic Materials M...ijtsrd
The management of working capital involves managing inventories, accounts receivable and payable, and cash. Based on this assertion, this dissertation is to examine working capital management and the financial performance of basic materials manufacturing companies in Nigeria. The objective of the study is to examine the relationship between working capital management and financial performance of basic material manufacturing companies in Nigeria, The study is anchored with Fisher's separation theory. The study used ex post facto research design which also known as after the effect research, data analyses of financial information were extracted from the manufacturing companies Financial Statements for the years 2001 to 2015. These statements used to examine how an independent variable, present prior to the study, affects a dependent variable. In order to arrive at the testable conclusion, stratified random sampling techniques were adopted. Ordinary Least Square OLS regression model were used in this research work with the model findings, which revealed that debtors, creditors and inventory has no significant relationship with return on investment of manufacturing companies in Nigeria. The study therefore recommended that managers of basic material manufacturing companies in Nigeria should intensify effort on how to improve the management of debtor as a component of working capital components than creditors and inventories in their industry. Olaniyi, Ayo R | Nzewi, Ugochukwu C ""Working Capital Management and the Financial Performance of Basic Materials Manufacturing Companies in Nigeria"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-2 , February 2020,
URL: https://www.ijtsrd.com/papers/ijtsrd30225.pdf
Paper Url : https://www.ijtsrd.com/management/accounting-and-finance/30225/working-capital-management-and-the-financial-performance-of-basic-materials-manufacturing-companies-in-nigeria/olaniyi-ayo-r
Working capital management of automobiles industry in haryana [www.writekraft...WriteKraft Dissertations
Writekraft Research & Publication LLP.
We are one of the leading PhD assistance company that deals in helping PhD scholars in their Thesis, Research paper writing and publication work. We are providing custom PhD Thesis written for you exactly the way you want along with a Turnitin plagiarism report.
For more Information Contact us@ admin@writekraft.com
Or Call us @ 7753818181, 9838033084
www.writekraft.com
Working capital management of automobiles industry in haryana [www.writekraft...WriteKraft Dissertations
Writekraft Research and Publications LLP was initially formed, informally, in 2006 by a group of scholars to help fellow students. Gradually, with several dissertations, thesis and assignments receiving acclaim and a good grade, Writekraft was officially founded in 2011 Since its establishment, Writekraft Research & Publications LLP is Guiding and Mentoring PhD Scholars.
Our Mission:
To provide breakthrough research works to our clients through Perseverant efforts towards creativity and innovation”.
Vision:
Writekraft endeavours to be the leading global research and publications company that will fulfil all research needs of our clients. We will achieve this vision through:
Analyzing every customer's aims, objectives and purpose of research
Using advanced and latest tools and technique of research and analysis
Coordinating and including their own ideas and knowledge
Providing the desired inferences and results of the research
In the past decade, we have successfully assisted students from various universities in India and globally. We at Writekraft Research & Publications LLP head office in Kanpur, India are most trusted and professional Research, Writing, Guidance and Publication Service Provider for PhD. Our services meet all your PhD Admissions, Thesis Preparation and Research Paper Publication needs with highest regards for the quality you prefer.
Our Achievements:
NATIONAL AWARD FOR BEST RESEARCH PROJECT (By Hon. President APJ Abdul Kalam)
GOLD MEDAL FOR RESEARCH ON DISABILITY (By Disabled’s Club of India)
NOMINATED FOR BEST MSME AWARDS 2017
5 STAR RATING ON GOOGLE
We have PhD experts from reputed institutions/ organizations like Indian Institute of Technology (IIT), Indian Institute of Management (IIM) and many more apex education institutions in India. Our works are tailored and drafted as per your requirements and are totally unique.
From past years our core advisory members, research team assisted research scholars from various universities from all corners of world.
Subjects/Areas We Cover:
Management, Commerce, Finance, Marketing, Psychology, Education, Sociology, Mass communications, English Literature, English Language, Law, History, Computer Science & Engineering, Electronics & Communication Engineering, Mechanical Engineering, Civil Engineering, Electrical Engineering, Pharmacy & Healthcare.
Working capital management of automobiles industry in haryana [www.writekraft...WriteKraft Dissertations
Writekraft Research & Publication LLP.
We are one of the leading PhD assistance company that deals in helping PhD scholars in their Thesis, Research paper writing and publication work. We are providing custom PhD Thesis written for you exactly the way you want along with a Turnitin plagiarism report.
For more Information Contact us@ admin@writekraft.com
Or Call us @ 7753818181, 9838033084
www.writekraft.com
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Mba iii-advanced financial management [10 mbafm321]-notesAnita Nadagouda
The document discusses the topics of working capital management over 8 modules. Module 1 defines working capital and discusses determining optimal levels of current assets and sources of working capital financing. It describes the need for adequate working capital management and concepts like gross and net working capital. Module 2 covers cash management strategies like cash forecasting. Module 3 discusses receivables management through credit policies and evaluation. Module 4 covers inventory management techniques. Later modules discuss capital structure, dividend policy, hybrid financing, corporate financial modeling, and financial management of sick companies.
This document discusses keys to successful working capital management. It begins by explaining that working capital management involves ensuring a company can fund short-term assets with short-term liabilities. However, many CFOs struggle with identifying drivers of working capital and setting the appropriate levels. The document then discusses factors that influence working capital performance, such as external constraints and internal silos. It stresses the importance of cash flow forecasting and considering various scenarios. Finally, it provides several ways companies can improve their working capital position, such as educating personnel, streamlining disputes, and setting achievable targets.
Similar to Nwankwo, odi an empirical analysis of corporate survival and growth ijsaid v12 n1 2010 - copy (20)
Temple of Asclepius in Thrace. Excavation resultsKrassimira Luka
The temple and the sanctuary around were dedicated to Asklepios Zmidrenus. This name has been known since 1875 when an inscription dedicated to him was discovered in Rome. The inscription is dated in 227 AD and was left by soldiers originating from the city of Philippopolis (modern Plovdiv).
This presentation was provided by Racquel Jemison, Ph.D., Christina MacLaughlin, Ph.D., and Paulomi Majumder. Ph.D., all of the American Chemical Society, for the second session of NISO's 2024 Training Series "DEIA in the Scholarly Landscape." Session Two: 'Expanding Pathways to Publishing Careers,' was held June 13, 2024.
Leveraging Generative AI to Drive Nonprofit InnovationTechSoup
In this webinar, participants learned how to utilize Generative AI to streamline operations and elevate member engagement. Amazon Web Service experts provided a customer specific use cases and dived into low/no-code tools that are quick and easy to deploy through Amazon Web Service (AWS.)
How Barcodes Can Be Leveraged Within Odoo 17Celine George
In this presentation, we will explore how barcodes can be leveraged within Odoo 17 to streamline our manufacturing processes. We will cover the configuration steps, how to utilize barcodes in different manufacturing scenarios, and the overall benefits of implementing this technology.
THE SACRIFICE HOW PRO-PALESTINE PROTESTS STUDENTS ARE SACRIFICING TO CHANGE T...indexPub
The recent surge in pro-Palestine student activism has prompted significant responses from universities, ranging from negotiations and divestment commitments to increased transparency about investments in companies supporting the war on Gaza. This activism has led to the cessation of student encampments but also highlighted the substantial sacrifices made by students, including academic disruptions and personal risks. The primary drivers of these protests are poor university administration, lack of transparency, and inadequate communication between officials and students. This study examines the profound emotional, psychological, and professional impacts on students engaged in pro-Palestine protests, focusing on Generation Z's (Gen-Z) activism dynamics. This paper explores the significant sacrifices made by these students and even the professors supporting the pro-Palestine movement, with a focus on recent global movements. Through an in-depth analysis of printed and electronic media, the study examines the impacts of these sacrifices on the academic and personal lives of those involved. The paper highlights examples from various universities, demonstrating student activism's long-term and short-term effects, including disciplinary actions, social backlash, and career implications. The researchers also explore the broader implications of student sacrifices. The findings reveal that these sacrifices are driven by a profound commitment to justice and human rights, and are influenced by the increasing availability of information, peer interactions, and personal convictions. The study also discusses the broader implications of this activism, comparing it to historical precedents and assessing its potential to influence policy and public opinion. The emotional and psychological toll on student activists is significant, but their sense of purpose and community support mitigates some of these challenges. However, the researchers call for acknowledging the broader Impact of these sacrifices on the future global movement of FreePalestine.
Level 3 NCEA - NZ: A Nation In the Making 1872 - 1900 SML.pptHenry Hollis
The History of NZ 1870-1900.
Making of a Nation.
From the NZ Wars to Liberals,
Richard Seddon, George Grey,
Social Laboratory, New Zealand,
Confiscations, Kotahitanga, Kingitanga, Parliament, Suffrage, Repudiation, Economic Change, Agriculture, Gold Mining, Timber, Flax, Sheep, Dairying,
Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...EduSkills OECD
Andreas Schleicher, Director of Education and Skills at the OECD presents at the launch of PISA 2022 Volume III - Creative Minds, Creative Schools on 18 June 2024.
🔥🔥🔥🔥🔥🔥🔥🔥🔥
إضغ بين إيديكم من أقوى الملازم التي صممتها
ملزمة تشريح الجهاز الهيكلي (نظري 3)
💀💀💀💀💀💀💀💀💀💀
تتميز هذهِ الملزمة بعِدة مُميزات :
1- مُترجمة ترجمة تُناسب جميع المستويات
2- تحتوي على 78 رسم توضيحي لكل كلمة موجودة بالملزمة (لكل كلمة !!!!)
#فهم_ماكو_درخ
3- دقة الكتابة والصور عالية جداً جداً جداً
4- هُنالك بعض المعلومات تم توضيحها بشكل تفصيلي جداً (تُعتبر لدى الطالب أو الطالبة بإنها معلومات مُبهمة ومع ذلك تم توضيح هذهِ المعلومات المُبهمة بشكل تفصيلي جداً
5- الملزمة تشرح نفسها ب نفسها بس تكلك تعال اقراني
6- تحتوي الملزمة في اول سلايد على خارطة تتضمن جميع تفرُعات معلومات الجهاز الهيكلي المذكورة في هذهِ الملزمة
واخيراً هذهِ الملزمة حلالٌ عليكم وإتمنى منكم إن تدعولي بالخير والصحة والعافية فقط
كل التوفيق زملائي وزميلاتي ، زميلكم محمد الذهبي 💊💊
🔥🔥🔥🔥🔥🔥🔥🔥🔥
BIOLOGY NATIONAL EXAMINATION COUNCIL (NECO) 2024 PRACTICAL MANUAL.pptx
Nwankwo, odi an empirical analysis of corporate survival and growth ijsaid v12 n1 2010 - copy
1. INTERNATIONAL JOURNAL OF SCHOLARLY ACADEMIC INTELLECTUAL DIVERSITY
VOLUME 12, NUMBER 1, 2010
1
An Empirical Analysis of Corporate Survival and
Growth: Evidence from Efficient Working Capital
Management
Odi Nwankwo
Ebonyi State University
Ebonyi State, Nigeria
G. Solomon Osho
Prairie View A&M University
The Texas A&M University System
Prairie View, Texas
________________________________________________________________________
ABSTRACT
A lot of corporate organizations could not live to achieve their objectives due to
inefficiency in the management of its working capital. Every organization, both
private and public needs sufficient working capital to enable it meet up with its
daily basic financial obligations. The objectives of this research work are: to
examine efficient working capital management as a prerequisite to corporate
survival and growth; to find out what makes up working capital and if possible the
best combination; and to suggest some measures for improvement in working
capital management. The researcher of this work used desk research method and
the findings were that: the risk of changes in demand or technology leaves surplus
stock unsalable; the risk of inability to settle financial obligations as at when due,
and excess liquid capital tied up unproductively. The following recommendations
were made which includes: the financial manager should have knowledge of the
sources of working capital funds as well as investment opportunities where idle
funds may be temporarily invested; the management decisions concerning working
capital should not be left to the financial manager only and when any company
manages its working capital well, it has every leverage opportunity to continue in
business indefinitely (both in profitability and in liquidity).
Introduction
The existence, survival, growth and stability of any corporate body is highly
dependent on the efficiency and effectiveness of its management. This is measured by the
ability of the organization’s management to combine all the necessary material for
optimal and efficient actualization of their set objectives within the stipulated time. In any
organization, cash forms the life wire, which determines to a large-extent, its growth,
existence and survival among other competing firms. As a result, it becomes imperative
for the management of any organization to give a close attention to the management of
working capital if they want to stand the test of time. The management decides the best
proportion of its investment on both fixed and current assets and finally her liability level
2. INTERNATIONAL JOURNAL OF SCHOLARLY ACADEMIC INTELLECTUAL DIVERSITY
2____________________________________________________________________________________
to enable improvement and correction of imbalances in the liquidity position of the firm.
Most organizations believe in profitability, but it is generally accepted that liquidity is
more important for survival and growth. The reason behind this premise is that most
organizations make profit but do not posses enough or adequate, liquid asset to off-set
current obligations. However, this inability to make payment at when due may definitely
have serious consequences on the organization financial growth. Weak liquidity makes it
unsafe and unsound for the survival of the company but all it takes is efficient and
effective management.
Efficiency means doing something with little or no wastage especially in terms of
time, energy and money. In other words, it is the achievement of great task with less than
the proportionate factor input. According to Okafor and Udu (2002, p. 84), “Efficiency is
the ability to work well without wasting time and resources.” Also, Horby (2000) stated
that efficiency is doing something well and thoroughly with no waste of time, money or
energy. This is to say that the achievement outcome is far greater than the resources put
in to achieve the defined outcome. Efficient working capital management involves the
mix of the current assets, current liabilities and fixed assets of the business in order to
meet up with the day to day need of the business in question or in order words to keep the
business going with less waste especially in terms of time, energy and goodwill.
Nwankwo (2005) opined that efficient working capital is based on the decision of the
management of the company in determining the volume of current assets over current
liabilities that the company is prepared to have in the company’s balance sheet. Ibenta
(2005, p. 406) further defined working capital management as “all aspects of the
administration of both current assets and current liabilities. It is the firms’ investment in
short term assets – cash, short term securities, account receivable and inventories.”
Working capital management has to do with using the money that is needed to run
the day-to-day operations of an organization efficiently in order to achieve the aims and
objectives of the organization, basically profit making and growth, and good financial
standing. Efficient working capital management is a continuous process that involves a
number of day-to-day operations and decisions that determine the following:
- The firm’s level of current assets investment,
- The specific sources and mix of short-term credit the company should use,
- The level of investment in each type of current assets, and
- The level of short term and long term debt the firm will use to finance its assets.
In the same regard, Block and Hirt (1992, p. 8) defined it as:
working capital management involves financing and management
of the current asset of the firm. The financial managers probably
devote more time in working capital management than to any other
activity. Current assets, by their nature, are changing daily, if not
hourly, and management decision must be made.
Close relevant operations in financial management has disclosed that working
capital management is unavoidable for corporate growth and survival as was viewed by
(Pandey, 2006). To achieve efficient working capital management, it is worthy to note the
issue of uncertainty that is inherent in this present day’s economic/business environment.
According to Brockington (1996, p. 205), “it threatens the survival and growth of every
3. ODI NWANKWO AND G. SOLOMON OSHO
____________________________________________________________________________________3
business, thus making sound liquidity and cash management a point of interest in
corporate planning.”
Bananda, Ldama, and Itolo (2008) substantiated the fact by stating that the
importance of management of liquid asset has been gradually and systematically gaining
prominence and growth in the most manufacturing companies or firms (Soyaduzzaman,
2006; Shin & Soenen, 1998). This incidental prominence and growth of liquidity
management makes it very apparent that no firm can survive without an efficient and
effective management of its net working capital which is total current assets less total
current liabilities. The rational for working capital management is the fact that current
assets characteristically constitutes more than half the assets of most businesses and the
size and relative volatility of these assets makes it necessary for such assets to be
monitored closely. Finally, efficient working capital management is crucial to small,
medium and large organizations because if the efficiency and effectiveness of managing
working capital is not available, no amount of finance provided will transform a
financially weak organization into a strong and viable organization with a remarkable
reputation that would stand the serve test of time.
Net working capital (current assets minus current liabilities) has always been an
important measure of a company’s liquidity and its ability to support growth. But too
much working capital usually means that too much money is tied up in account
receivable and inventory. Buchmann, Roos, Juna, and Martin (2008) stated that the knee-
jerk reaction to this problem is to aggressively collect receivables, ruthlessly suppressing
payments to supplies, and cutting inventory across the board. But this only attacks the
symptoms of working capital issues not the root cause of the problem.
However, despite all the implicit and explicit costs which include among others;
the risk of inability to pay bills as at when due; excess liquid capital tied up
unproductively; the risk of deterioration due to the length of time in storage and the risk
of changes in demand or technology which leaves surplus stock unusable, companies
strive to manage its profitability for growth and liquidity for survival. The problem is to
identify the difficulties many firms find themselves, when they perceive that profit
making is at the expense of running illiquid. This will go along way to identifying the
relationship existing between growth and survival in the management of working capital.
Thus, the study is to address the issue of efficient working capital as a prerequisite to
corporate survival and growth.
Owing to the trend of computerization and globalization of taking the lead in the
world today, it becomes worrisome where a firm is over loaded with inventories and
other marketable securities when cash is in short supply for payments. And also a
situation where a firm is over loaded with idle cash, whereas there are very many
profitable investments that could have used some of such cash. This calls for urgent
attention if such a firm is to grow and survive the harsh economic and competitive
environment that has engulfed today’s business world. Based on the above, the major
objective of this research is to examine efficient working capital management as a
prerequisite to corporate survival and growth. Other specific objectives include the
following:
1. To find out what makes up working capital and if possible the best combination,
2. To examine the management pattern of inventory,
3. To analyze accounts receivable management along with its impact on working
capital management,
4. INTERNATIONAL JOURNAL OF SCHOLARLY ACADEMIC INTELLECTUAL DIVERSITY
4____________________________________________________________________________________
4. To analyze cash position and the efficiency with which cash is managed, and
5. To suggest some measure for improvement in working capital management.
Literature Review
Working capital in simple term is the amount of funds which a company needs to
finance day-to-day operations. Opinions differ on the concept of working capital. Gross
working capital in defined as the firm’s total current asset. The purpose of the present
study is to analyze the various concepts of working capital and find out the feasibility of
the concept of the working capital in the light of better planning and control. A concept
of gross working capital adheres to the overall investment in current assets and financing
of the same. Nunn (1981) noted that net working capital in the excess of current assets
over current liabilities. Problems of working capital management involve the problem of
determining the optimum level of investment in each component of current assets that is
inventory, receivables, cash and other short-term investment. The basic focus of
managing working capital should be to optimize the firms’ investment in them. An expert
(Van Horne) in the financial management is of the opinion that problem of working
capital is one of the factors responsible for the low profitability in manufacturing sector.
Better planning and control of working capital or in other words, proper utilization of
optimum quantity of working capital increases the earning power of the company subject
to the existence of operating margin.
Elements of Working Capital
Working capital management is a branch of total quality management that focuses
on decision making. It is from this point that Owoh (2002) viewed working capital
management to be one of the key ambits of financial management which is decision
making driven with particular eye on the organization and arrangement of current assets,
current liabilities and fixed assets. This setting will be able to meet up with the
Company’s financial needs and help the Company carry out its operations perfectly.
Again, Alile (1983, p. 4) came up with his own contribution that, the decision making
which is the nucleus of working capital management encompasses the following:
- Decision on the company’s level of current asset in investment,
- Decision on the level of investment in each type of current asset,
- Decision on the specific sources and mix of short-term credit the
company should use, and
- Decision on the levels of short-term and long term debts the company
uses for financing activities.
So working capital is the money that is needed to run a business rather than money that is
used to buy fixed assets when starting a business. Working capital (Table 1) is the gross
current assets which includes such items as cash, marketable securities, accounts
receivables, and inventories while the gross current liabilities includes such items as trade
creditors, accrued wages, taxes, dividend, Bank overdraft among others. Therefore the net
5. ODI NWANKWO AND G. SOLOMON OSHO
____________________________________________________________________________________5
working capital is total current assets less total current liabilities. This represents those
assets that can be turned into cash within one accounting period usually a year.
Table 1
Working Capital
Current assets: N’ m
Inventory
Marketable securities 250
Accounts receivables 450
Cash 100
Total current assets 1100
Less: current liabilities:
Trade creditors 50
Accrued wages 150
Accrued taxes 30
Bank overdraft 150
Other current liabilities 70
Total current liabilities 450
Net working capital 650
Cash: Cash is the most liquid current asset o f a firm. Cash include the money in the
currency, cash in till and demand deposits held in the bank and even marketable
securities (Idam, 2002). Among the current assets o f any organization, cash is the most
significant of all because it can command every other asset in the organization. Although,
cash is the most significant o f all the assets, cash is sterile in nature in that it does not
generate revenue. Hence, the management of cash position of an organization is very
important to financial managers. The financial managers must maintain adequate cash to
meet the payment obligations of the company, while any cash excesses should be
invested in profitable assets.
Account Receivables: Account receivables are debts owed a company by her valuable
customer who are trusted with the goods and services. The amount, duration to pay
depends on the character and integrity of the customer. According to Emekekwue (1990,
p. 394), “Accounts receivable is an aggregate of all the debts owned to a firm at a
particular point in time. It represents the amount a firm expects to receive from its debtors
in payment of goods and services delivered or rendered by the firm.” Therefore, it is the
duty of the financial manager to make decisions as regarding the policy that must be
adopted in extending credit facilities to customers because of the problem of possible
default.
Inventories: Inventories commonly known as stocks are the least liquid of a company’s
current assets and could represent significant part of the company’s investment. There are
three main types of inventories namely; raw materials, work in progress, and finished
goods. Raw materials are the stocks that have been purchased and will be used in the
process of manufacture while work in progress represents partially finished goods.
Finished goods on the other hand, represent those items of stock that are ready to be
6. INTERNATIONAL JOURNAL OF SCHOLARLY ACADEMIC INTELLECTUAL DIVERSITY
6____________________________________________________________________________________
monetized. In this regard therefore, the financial manager has to put into consideration
the ordering cost, carrying cost and stock out cost of the inventory.
Bank Overdraft: This is credit arrangement whereby the borrower will withdraw funds
in excess of the balance in his current account up to certain specified limit during a
stipulated time. Interest is charged on utilized amount.
Trade Creditors: In the ordinary course of events, a firm buys its supplies and materials
on credit recording the debt as accounts payable or trade credit. Trade credit means a
credit that a customer gets from his supplies of goods in the normal course of business.
Accrued Expenses: Accrued expenses represent liability that a firm has to pay for the
services, which it has already received. They represent a spontaneous interest-free source
of financing. Accrued wages and salaries, taxes and interest are also among the
components.
Management of the Three Components of Working-Capital
They are three factors driving working capital levels. These includes: inventory,
accounts receivables and bills payables. In effect account receivables and payables are
different ways of financing inventory. Companies need to handle the three
simultaneously across the board to drive fundamental reductions in asset levels. Given
the wide range of possible actions, management focus is critical. A realistic plan with
clear priorities is the best approach, since an overly ambitious agenda can stretch internal
capabilities and deliver suboptimal results (Dittmar & Smith, 2005). Instead, companies
should focus on the most promising actions that would not impair flexibility and
performance. These actions will vary depending on the industry and the company’s
condition, but they should have three overall objectives.
Reduce Inventory: Excess inventory is one of the most over looked sources of cash, in
most cases accounting for almost half the savings from working - capital management.
By cutting across enterprise processes as well as processes involving suppliers and
customers, companies can minimize inventory throughout the value chain. With raw
materials, companies can often achieve substantial gains by redefining optimal safety-
stock levels and batch sizes. This requires a thorough analysis of customer demand
patterns; customer forecast quality, and supplier lead times. By assessing these factors,
companies can often sharply reduce inventory levels throughout the supply chain.
Speed Up Receivables Collections: Many companies are early payers and late
collectors. Other companies have cash flows problems caused by a mismatch in timing
between incurred costs and receipt of customer payments. One way to ensure a steadier
flow of cash is to better align incurred costs with customer payments by asking for a
down payment and setting up series of staggered payments to ensure that most
receivables have been collected by the time of delivery. All companies should aim to
reduce overdue payments and accelerate collection and setting up a schedule of escalating
payment demands.
Companies should also slowdown their payment terms and conditions against best
practice and negotiating with their valued customers. The goal of shortening customers’
payment terms, however, must balance the risk of jeopardizing the relationship.
7. ODI NWANKWO AND G. SOLOMON OSHO
____________________________________________________________________________________7
Companies should always seek a fair, mutually beneficial, and non-confrontational
solution.
Rethink Payable Terms: Companies are at one end of the business, and then companies
that are slow in payment use the unpaid payables as a source of financing at the other
end. Between these two extremes is a more effective, integrated approach to payment
renegotiation that takes into account all aspects of the customer – supplier relationship,
from price and payment terms to delivery time frames. Companies should benchmark
terms and conditions against industry best practices and eliminate early payments, except
when attractive discounts are offered. When renegotiating payment conditions they
should consider the length of their relationship with supplies as well as competitive
loyalties. Moreover, linking supplier’s payment terms to their performance in areas such
as delivery accuracy complaint ratios, and other lead time can improve underlying
processes and reduce working capital overall by analyzing each component of working
capital along the line, companies can identify and remove the obstacles that slow cash
flow. If working capital is managed well it generates more cash for growth along with
streamlined processes and lower costs.
Working Capital Theories and Implications
There are basically three theories of working capital, which includes the
conservative approach, the aggressive approach and the moderate approach (Nwankwo,
2005). These theories are examined below with their implications.
- The Conservative Approach: In this approach permanent capital is being used to
finance all permanent assets requirements and also to meet some or all of the
seasonal demands. In view of conservative approach to working capital
management, a company will keep a large quantity of current assets in relations to
the total assets of the company. The implication of this approach is that it yields a
lower expected profitability resulting in a lower risk. This type of policy will also
increase the company’s net working capital situation but the firm will be short of
funds to be used in other productive sectors.
- The Aggressive Approach: In this approach, the company finances all of its
fixed assets with long term capital but part of its permanent current assets with
short-term credit (Van Horne, 1980). Under this policy, the company holds
relatively small portion of its total assets in form of current assets. The
implication of the aggressive approach is that it yields higher profitability
resulting in a higher risk and lower working capital.
- The Moderate Approach: This strategy minimizes the risk that the company will
be unable to pay off its matured obligations. At this limits, a company could
attempt to match exactly the maturity structure of its assets and liabilities.
Inventory expected to be sold in thirty days could be financed with thirty days
bank overdraft. The implication of this approach is that it yields moderate expected
profitability resulting in moderate risk, and the working capital position of the company
will be in optimum balance.
As the name implies it is neither aggressive nor conservative but it falls in
between the two policies. It is representing moderate situations. The optimal level of
8. INTERNATIONAL JOURNAL OF SCHOLARLY ACADEMIC INTELLECTUAL DIVERSITY
8____________________________________________________________________________________
working capital is reached when the degree of returns expected maximizes the
shareholders wealth and it must be pointed out that there is no best working capital theory
or policy to suit every organization at all times. Lastly, the working capital theories can
be better appreciated by the diagram from Moyer, Mcgoigan, and Kretlow (1984).
Figure 1. Three alternative working capital investment policies.
Factors Influencing a Firm’s Working Capital Management
There are many factors that determine or influence working capital management.
Industry practices are significant determinants of a firm’s working capital management
practices (Hawawini, Viallet, & Vora, 1986). The working capital policies of say a soft
drink company are going to be quite different from those of a retail shoe company.
Consequently, it is important to control the influence of industry practices on firm’s
working capital practices. Secondly, firm size may influence the efficiency of a
company’s working capital management. Larger firms may require larger investments in
working capital because of their larger sales levels. Alternatively, larger firms may be
able to use their size to forge relationships with suppliers that are necessary for reductions
in investments in working capital.
Thus, firm sizes are likely to influence the efficiency of a firm’s working capital
management, though the direction of the effect in an open question. Thirdly, the
proportion of a firm’s assets accounted for by fixed assets might exercise an influence on
a firm’s working capital performance. For example, the inventory problems of an
automobile parts manufacture are likely to be quite different from that of block industry
producers. Again the account receivables problems of these types of companies are also
likely to be different. Fourthly, company’s sales influence the company’s working capital
position. It is expected that company’s expected future sale to influence its working
capital investment, and so its cash conversion cycle.
For instance, a company might build up inventories in anticipation of future sales
growth, and as a result, may also increase its use of trade credit. Arthur (1992) opined
that there are various factors which determine the level of working capital required by a
business and such factors include nature of business, market condition, seasonality of
operations and condition of supply. These factors are discussed in details as follows:
Currentassets
Sales (N)
9. ODI NWANKWO AND G. SOLOMON OSHO
____________________________________________________________________________________9
Nature of Business: This is one of the primarily factors influencing the working capital
requirements of a firm. For instance, a manufacturing firm has a longer operating cycle
and invests more in its current assets. It thus, has a greater working capital requirement.
On the other hand, a service firm like a hotel or entertainment centre has a short operating
cycle since it sells mostly on cash basis and has a lower working capital requirement.
Market Conditions: Another major factor influencing working capital requirement is the
level of competition. If the competition is high, the company should have enough
inventories of finished goods to meet up with certain levels of demand. This will require
a greater need of working capital. On the other hand, when competition is low, but
demands are high, the company can afford to have a smaller inventory and would
consequently require lower working capital.
Seasonality of Operations: Some firms produce seasonal products. Products that are in
high demand during a particular period of the year, for instance, sachet water producing
companies sell more during the dry season period than in the rainy season. Such firms
have greater working capital requirement during peak seasons and lower needs during
other seasons. Companies whose sales are not affected by seasons have stable working
capital requirements.
Supply Conditions: If supply of raw materials and spare parts is timely, and adequate,
the firm can get by with a comparatively low inventory level. If supply is scarce and
unpredictable or unavailable during a particular season, the firm will have to obtain raw
material when it is available. It would thus need more working capital to carry a large
inventory and conduct operations all year round.
Figure 2. Working capital cycle in a firm.
Goods and Service
For Sale
Debtor’s Bills
Receivable
Bad Debts
Cash Sales
Cash
Rent,
Taxes Bills
Owners’
Creditors
Credit Sales
Stock Others
Purchases, Salaries
Wages
Payment
Purchases
Raw Materials
10. INTERNATIONAL JOURNAL OF SCHOLARLY ACADEMIC INTELLECTUAL DIVERSITY
10____________________________________________________________________________________
Working Capital Cycle and Budgeting
Working capital cycle determines the company income; it could be seen as the
revolving or operating capital of the business that routinely turn over many times in a
year. According to Ibenta (2005, p.401), “It is the length of time between the company’s
outlay of cash for raw materials, wages and other expenditures and the inflow of cash
from sale of the goods.
Looking at the manufacturing company, working capital cycle is the average time
that raw materials remain in stock less the period of credit taken from supplies plus the
time taken for producing the goods, plus the time the goods remain in finished goods,
plus the time taken by credit customers to pay for the goods. This is important in efficient
working capital management because this cycle determines the sales, profitability and
likelihood of growth and possibly ability to continue in business. As working capital
cycle is taking place, working capital budgeting takes its place almost at the same time
since sales, capital expenditure and cost budgets are constructed and decisions that will
affect working capital and source of finance for the company will be decided
simultaneously.
A plan to expand or open new outlets, for example, has implications for amounts
of stock held. Plan to build new factories will almost certainly require additional
borrowing facilities. According to Anumaka (2007, p. 25), the following issues need to
be addressed:
- The changes that are likely to occur in stock values, debtors
and creditors,
- Consideration of stock policies, and credit periods (both with
debtors and creditors) will be necessary,
- The values which will be tied up in working capitals both
during, and at the end of the budget period,
- Evaluation of the major needs for (or repayment of) finance,
- The calculation and implications of interest costs,
- Any plans to raise new funds from shareholders, and
- Evaluation of the firms divided policy.
Importance of Working Capital Management
Working capital management is important to companies because it provides profit
through sales that gives rise to growth. It provides liquidity through cash flow that gives
rise to corporate stability and existence. Weston and Coperland (1986) have pointed out
that working capital management includes a number of aspects that makes it an important
topic of study and such aspects includes:
- Surveys indicate that the largest portion of financial manager’s time is devoted to
the day-to-day internal operation of the firm, which can appropriately be
subsumed under the heading of working capital management.
11. ODI NWANKWO AND G. SOLOMON OSHO
____________________________________________________________________________________11
- Characteristically, current assets represent more than half the total assets of a
business firm. Because they represent such a large investment and because this
investment tends to be relatively volatile, current asset requires financial
manager’s regular attention.
- The relationship between sales growth and the need to finance current assets is
close and direct. Sales increase production and it requires additional inventories
and perhaps cash balances. All such needs must be financed, and since they are
closely related to sales volume it is imperative that financial manager keep abreast
of development in the working capital segment of the firm. Of course, continued
sales increase requires additional long-term assets, which must also be financed.
Nwankwo (2007) confirmed that working capital has a high turnover rate unlike
long-term assets.
- Investments in inventories and accounts receivable are receivable during the
company’s normal operating cycle when stock are sold and accounts receivable
are collected. Ojiuko (2001) went further to illustrate that a manufacturing
company’s operating cycle consist of three primary activities purchasing
resources, manufacturing the product and distributing (selling) the product. These
activities create funds flows that are both unsynchronized and uncertain. They are
- unsynchronized, because cash disbursements usually take place before cash
receipts. They are uncertain because future sales and costs, which generate the
respective receipts and disbursement, cannot be forecasted with complete
accuracy.
Concluding Remarks
Efficient working capital is really a prerequisite to growth and existence of
corporate enterprises because it dictates the level of production, inventory and sales.
Without working capital every aspect of the enterprise will cease to exist that is there will
be no money for the day-to day running of the business which is the aim of every
business establishment. Well-managed working capital will produce an increased
profitability to meet the financial needs of the company at all times. Increasing the
corporate setting will bring about good corporate image, going concern ability, increased
business value, expansion, peaceful existence amongst workers and management. They
are many factors like industry practice, corporate size proportion of a firm’s assets in
long term, and current assets, market share, nature of business, and business environment
are significant determinants of working capital management in an organization.
On the other hand, where there is inefficient management of working capital of a
firm, there is every propensity that a lot of mayhem will fall on the organization. Such
mishap may range from the setting, inability to expand; reduction in value of the
company as well as its shares; inability of the management to cope with the
organizational technical improvements; and financial losses, liquidity, susceptibility to
liquidation and insolvency. Finally, when any company manages its working capital well,
it has every leverage opportunity to continue in business indefinitely (both in profitability
and in liquidity). Based on this research work, the researcher has proffered the following
recommendations:
12. INTERNATIONAL JOURNAL OF SCHOLARLY ACADEMIC INTELLECTUAL DIVERSITY
12____________________________________________________________________________________
• The financial manager should have knowledge of the sources of working capital
funds as well as investment opportunities where idle funds may be temporarily
invested.
• The current assets at all times should be sufficiently in excess of current liabilities
to constitute buffer for maturing obligations within the ordinary operating cycle of
a business.
• The management decisions concerning working capital should not be left to the
financial manager alone. Other departmental heads should partake for optimality
to be attained easily.
• The decision on how to optimize and finance current assets should be highly
considered with care.
• Inter firm comparison should be made from time to time in the similar
organization.
• Financial information system should be introduced to develop financial discipline
in working capital management.
• Working capital Norms for maintaining optimum quantity of raw materials, work-
in-progress, finished goods and store, and spares are to be developed.
• Above all financial forecasting, planning and control devices are to be move
intensive to enhance the efficiency of cash management.
References
Alile, A.I. (1983). The Nigerian stock market in operation (p. 280). Lagos: South
Western Press.
Arthur, J. (1992). Basic financial management (p. 649). New Jersey: Prentice Hall
Publishers.
Anuamka M. (2007, October-December). Budgetary business organization. Journal of
the Chartered Institute of Bankers of Nigerian.
Bananda, R., Ldama, J., & Hodo, J. (2008). Critical analysis of problems and challenges
of global of business empowerment. Journal of Business Administration and
Management, 3(1).
Block S. B., & Hirt, G.A. (1992). Foundations of financial management (6th
ed.) (p. 807).
New York: Richard Drdyen Irwin, Incorporated.
Buchmann, P., Roos, A., Jung, U., & Martin, A. (2008). Cash for growth: The neglected
power of working-capital management. Boston: The Boston Consulting Group
Incorporated.
DiHnar, A., & Smith, J.M. (2002). Corporate liquidity, SSRN working paper. Retrieved
January 11, 2008, from http://ssrn.comm./abstract =516564
Emekawkue, P. (1990). Foundations of financial management (p. 625). Kinshasa:
African Bureau of Education Institute.
Hawawini, G., Viallet, P., & Vora, A.(1986). Industry influence on corporation working
capital decisions. Sloan Management Review, 27, 15 – 24.
13. ODI NWANKWO AND G. SOLOMON OSHO
____________________________________________________________________________________13
Hornby, A. S. (2000). Oxford advanced learners dictionary (p. 1558). New York :
Oxford University Press.
Ibenta, S. N. (2005). Investment analysis and financial management strategy (p. 45).
Enugu: Institute for Development Studies.
Idam, L. E. (2006). Business finance introduction (p. 228). Enugu: Zeeman Printing and
Publishing.
Moyer, R. C., Meguigan J.R., & Kretlow, Wij. (1984). Contemporary financial
management (2nd
ed.) (p. 756). New Jersey: Prentice Hall Publishers.
Nunn, K. (1981). The strategic determinants of working capital: A product – line
perspective. Journal of Financial Research, 4(2).
Nwankwo, O. (2005). Dimensions of financial management (p. 451). Enugu: Jones
Communication and Publishers.
Nwankwo, O. (2007). Efficient working capital management is prerequisite to corporate
survival. Journal of Economic and Business Review, 1(1).
Odife, O. D (1985). Understanding the Nigerian stock market (p. 201). Lagos: Vantage
Press.
Okafor, L. C., & Udu, A. A. (2002). Essentials of business management (p. 318).
Abakaliki: Willy Rose and Appleseed Publishing Company.
Ojiuko, A. A. (2001). Essentials of financial management (p. 412). Owerri-Nigeria: Bon
Publications.
Owoh, G. (2002). Financial management: A dialectic approach (2nd ed.) (p. 351).
Enugu – Nigeria: Saviour Press.
Pandey, J.M. (2006). Financial management (p. 1225). New Dethi: Vikas Publishing
Company Ltd.
Reback, R., & Sesia, A. (2000). Dell’s working capital. Harvard Business School Care,
201-209.
Sayaduzzaman, M. (2006). Working capital management: A case study of British
American tobacco. The Journal of Nepalese Business Studies, iii(1).
Shine, H., & Soenen, L. (1998). Efficiency of working capital management and corporate
profitability. Financial Practice and Education, 8, 37-45.
Van Hone (1980). Financial management (8th ed.) (p. 737). New York: Dryden Press.
Weston, F. J., & Copperland, E. (1986). Management finance (8th ed.) (p. 952). New
York: Drydem Press.