Working Capital Management in Cement Companies of Rajasthan

Abstract

In every business an optimum level of Working Capital is to be maintained for the purpose of day to day remittances. Any Business cannot grow in absence of satisfactory working capital level. In case of shortage of working capital the business may suffer scarcity of resources. But it should also be kept in mind that even working capital in excessive quantity, possibly will result into superfluous cost. Therefore, the management of business firm should goal an optimal level of working capital. Working capital should be ample enough to carry out the current liabilities but should not be much more than the genuine requirement. It must be ensured by the firm s managing people that the return yield through the funds engrossed in structuring working capital is no less than the return earned from other investment alternatives. In the circumstances, when the financial resources are insufficient and as a consequent capital cost is to be enlarged, management of working capital becomes even more crucial and significant due to its profound influence on liquidity and profitability of the business. Taking into consideration this perspective, the study has been undertaken to analyze the working capital management of the selected cement companies. The study Working Capital Management in Cement companies of Rajasthan examines the effectiveness of management of working capital components i.e. cash and bank balance, inventory, receivables and current liabilities components. Study tries to verify the usefulness and efficiency of managing all segments of working capital. newline