The study revealed that the liquidity of this industry is not satisfactory.
Background information Working capital refers to the funds that are used to meet short-term responsibilities or the funds used to carry out the day-to-day activities of an organization. The management of these resources is equivalently important as the management of the long term finance funds.
The management of the working capital is fundamental in making sure that the operations of the organization are smooth.
In every business, working capital is an important and critical part of an investment because it is impossible for an organization to run without these funds. Organizations requires adequate raw materials, finances to pay for labor, funds to create a stock to meet the demands of the consumers and the ability to provide goods on credit for its customers.
All these are financed by working capital. Businesses are unable to operate without adequate working capital. This necessitates the research on the management of these funds in an organization.
Working capital has been an area of interest Thesis on finance on working capital many researchers, particularly because of the effect of the funds on the operations of an organization.
During the times of recession organizations seek strategies that can be helpful in the improving the chances survival of the organization. External market factors play a role in the organization operations and the organization has minimal or no control of these factors.
This makes it important and critical to manage the working capital to facilitate and allow the organization to survive and increase their performance in these conditions. This is particularly important in large organizations where the management of working capital prevents liquidity problems and improves the capacity of the organization to manage in severe financial problems or any other unexpected change Padachi, Working capital is important because it allows the organization to maintain a production schedule and maintain sales, which are the major concerns of an organization.
The lack of a proper working capital interrupts the production process andincapacitates the organization, which may lead to the foreclosure of the business. Poor management of the working capital impairs the operations of an organization and affects the profitability and the survival of the organization.
This necessitates the research on proper mechanisms to manage these funds to ensure that the management of the organization pays the issue enough emphasis. Working capital is important in maintaining sound profitability and liquidity levels.
The current economy has made an increase the cost of capital and subsequently, this has necessitated more emphasis to be placed on working capital management. Increase in the working capital allows the organization to run with minimal external funding.
This use of working capital in the day-to-day operations is efficient and affordable as compared to external funding. The management main role is to ensure that a business is profitable and is in a capacity to meet its obligations. This makes the study and research on working capital management important to facilitate the achievement of the goals.
Investors play a vital part in financing the operations of an organization. The rate at which investors find an organization or investment to be attractive is determined by the risk and the profitability of the organization.
The working capital is major determinant of the risk of an organization or an investment. An increase in the working capital of an organization indicates that investing in the organization is not risky because the organization has a greater chance of survival as compared to a similar investing operating on a lower working capital.
The working capital of an organization is also a major determinant of the profitability of the organization Boisjoly, Consequently, the determination of strategies to manage the working capital effectively is very important to ensure that the organization attracts investors by increasing its profitability and reducing its risk.
According to Boisjolyworking capital management refers to the ability of the management of an organization to manage the short-term capital available to operate the day-to-day activities effectively.
The author describes the major components of working capital as cash received, receivables, and inventory. The management of the three components ensures that the organization is operating on a favorable working capital. Growth of a business is a major concern for the stakeholders of the organization.
The growth of an organization is characterized by its profitability and ability to survive and gain more market share.
The study and evaluation of working capital management is very important because these funds play an important role in determining the profitability, survival, and ability of the organization to gain more market share. Collectively, working capital affects all the stakeholders in an organization.
This makes the management of these funds important to ensure that every need of the stakeholders is met sufficiently.
Problem Statement Working capital is established as an important part of an organization. Many businesses are finding it hard to manage their working capital, which is a major influence in the foreclosure of businesses. This is as reported by Security exchange commission, which published a report indicating that fifty percent of the businesses fail due to lack of proper and effective working capital management strategies United State Securities and Exchange Commission, The overall problem is the lack of profitability and growth among organizations because of poor management of the working capital of organizations, which results to customer dissatisfaction, and the decreased sales of the company.
Purpose Statement The study seeks to evaluate the importance of working capital in the profitability of an organization. It also identifies the various components that make up the working capital. The study seeks to identify strategies that may be adopted to manage the working capital.
To establish the study adopts a qualitative and research methodology. This allows the study to develop concepts that can be utilized to manage capital.Thesis on working capital management pdf. November 26, Thesis on working capital management pdf Leave a Comment.
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alphabetnyc.com Working capital finance. Working capital finance is business finance designed to boost the working capital available to a business. It's often used for specific growth projects, such as taking on a bigger contract or investing in a new market/10().
· The Determinants of Working Capital Management Practices: A Malaysian Perspective A thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy at working capital components were managed within the organizational context.
The alphabetnyc.com · WORKING CAPITAL MANAGEMENT PRACTICES REQUIRED The work in this thesis is original and has not been submitted in part or Working capital is the capital required to finance a firm’s day-to-day operational activities.
It can be defined as current (short-term) assets minus current (short-term) liabilities. alphabetnyc.com Val's alphabetnyc.com · Although the biases lead to sub-optimal decisions in certain areas of working capital management (WCM), they can also be desirable attributes in other aspects of WCM.
We propose a profile of a good working capital manager. The European Journal of Finance. Volume 19, - Issue Published online: 28 Oct alphabetnyc.com The recent economic downturn of – has brought renewed focus on working capital policies.
In this paper we examine the role of business cycles on the working capital–profitability relationship using a sample of Finnish listed companies over an year alphabetnyc.com://alphabetnyc.com