Importance Of Working Capital Management

EXECUTIVE SUMMARY:

Now-a-days if we take any organization, working capital plays a very important role, as for any company inorder to maintain the day to day expenditure they need the capital. Many of the companies fail each year due to poor working capital management practices.

In simple term, working capital is an excess of current assets over the current liabilities. Good working capital management results in higher returns of current assets than the current liabilities to maintain a steady liquidity position of the organisation. Otherwise, working capital is a requirement of funds to meet the day to day working expenses. So a proper management of working capital is highly essential to ensure a dynamic stability of the financial position

So as a result working capital management is also given the least importance. So later they come to know the importance of the working capital management in managing the profitability and growth of the firm. And the poor managing of this working capital management is indeed one of the major reason for the cause of business failure.

1.4 OBJECTIVE OF THE STUDY: Every study has some kinds of objectives to be satisfied. This study is not an exception to it. The following are some of the goals which are tried to be find out in the study. 1) To study different components of working capital.

2) To analyze the liquidity and working capital trend over the period of 4years.

3) To see the changes in the operating cycle and the cash conversion cycle.

1.5 LIMITATIONS OF THE STUDY:-

Following are the impediments of the study:

1) Working capital management itself is a very vast topic. So due to the time constraints it was no possible for doing an indepth study about various practices which are followed at RINL.

2) Most of the facts and data in the financial terms are more confidential in nature and are not to be disclosed to outsiders.

3) The study is confined just to Four Year information of