Working Capital Management

Abstract

In today s globalized economy, WCM is of extreme importance, specifically in a capital- and abor-intensive sector, like manufacturing, where the onus is on continual advancement of products and technologies. So, integrating a mix of firm-level as well as macro-economic determinants influencing efficiency would assess the WCM at its best. This would expand the performance dimensions and opportunities for the overall manufacturing sector. Additionally, a better newlinemanagement of working capital adds to the value, profitability, and other opportunities (Sharma newlineand Kumar, 2011). Managing working capital efficiently saves the firms from facing financial newlineconstraints in the near future (Bodnaruk et al., 2015) as well. However, its inefficient management has seen substantial business failures making management of working capital components of utmost importance. Hence, first the working capital management (WCM) efficiency needs to be evaluated carefully to improve it. Second, the causes or factors behind inefficiency in managing the working capital needs focus. Lastly, a WCM efficiency prediction model would offer directions newlineto focus on the most vital determinants simulating the effect on WCM efficiency and be a valued newlineinformation source for promoting the existing knowledge body. The current research initiated with the general understanding of Indian manufacturing firms, emphasizing prominently on prevailing WCM efficiency in these firms. This study tries to offer a better understanding of WCM efficiency by answering the questions i.e. (a) How to assess the WCM efficiency in Indian manufacturing sector; (b) What is the prevailing WCM efficiency condition in Indian manufacturing sector; (c) Which are the foremost determinants influencing newlineWCM efficiency; (d) What is the relationship of selected determinants with WCM efficiency; newline(e)What is the order of the significant determinants based on their importance while examining vi relationship with WCM efficiency; (f) What are the recommendations drawn.