Working Capital Structure And Liquidity Analysis

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WORKING CAPITAL STRUCTURE AND LIQUIDITY ANALYSIS OF OIL AND GAS INDUSTRY Abstract Oil and Gas Industry plays a vital role in the socio-economic development of India. This study is designed to show the liquidity and Working Capital structure of Oil and Gas Industries, this study is mainly based on secondary data and the statistical tools like Mean, Standard Deviation, Coefficient Of Variance and Analysis Of Variance(ANOVA) have been used to the study. The study revealed that the liquidity of this industry is not satisfactory. KEY WORDS: working capital, liquidity,ANOVA, INTRODUCTION Working capital may be regarded as the blood circulatory system of any business unit. Its effective management can do much more for the success of the…show more content…
Both inadequate and excessive working capital is detrimental for a business concern. The excessive working capital can result in idle funds which could be used for earning profit while the inadequate working capital will interrupt the operations and will also impairs profitability (Chowdhury and Amin, 2007). The impact of overall working capital policies on the profitability of Pharmaceutical firms listed at Dhaka Stock Exchange was investigated by Chowdhury and Amin (2007). The primary and secondary data was used for the period 2000 to 2004 to analyze the working capital management policies. The results indicated that for the overall performance of the Pharmaceutical industry, working capital management played a vital role and there existed a positive relationship between current assets management and performance of firms. On the other side the questionnaire data used for the study highlighted that firms in this industry have been efficient in managing their cash, accounts receivables and accounts payable. Further this industry maintained large volume of Inventories but maintaining large inventories didn’t reflect inefficient management for this industry. The importance of working capital management efficiency for value creation of shareholders was presented by Shin and Soenen (1998). They empirically investigated, whether short Net Trading Cycle (NTC) is
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