Working Capital Management

8877 Words Nov 17th, 2010 36 Pages

1. Introduction of study

In the present competitive world, every firm, whether big, medium of small, needs working capital to carry on its operations and to achieve its targets. Proper management of working capital is an important role of firm’s life.

Working capital is essential to maintain the smooth running of business. No business can run successfully without an adequate amount of working capital. Inadequacy of working capital may lead the firm to insolvency and excessive working capital implies idle funds, which earns no profits for business.

Working capital management policies of a firm have a great effect on its profitability, liquidity and structural health of
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Thus, working capital management of selected trading firms is most important.

1.5. Chapter outline

Chapter one includes background of the study, research problem, objective, significance, chapter outline of the study

The second chapter consists of the detailed literature survey of the study. Literature survey of the study describes concepts of working capital, need for working capital, operating cycle concept, permanent and variable working capital, factors determining working capital, excess and inadequate working capital, ratio analysis, overtrading

The third chapter is allocated to discuss the methodology and conceptualization of the study in detail. That is research problem will be conceptualized based on the literature review. Hypotheses are formulated according to the conceptual model and literature review. Next operationlalization, data collection techniques and method of analyzing impact of working capital management on the profitability of trading firms.

The fourth chapter presents survey data presentation, which gathered through secondary data from annual report published by trading firms. Then data analyses are made by correlation analysis, regression analysis. These data are presented by using tables.

The fifth chapter will discuss the findings of the research based on the presented and analyzed data. The, hypothesis will be tested. Finally, it indicates conclusion and suggestion for further
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