A Study on Working Capital Management of Shanthi Feeds Private Limited

Abstract

Working capital is the amount of money that a business has immediately available to it. The way businesses handle their working capital will have an effect on their profitability and liquidity. In truth, a lot of businesses have heavily invested in their inventory and accounts receivable, and they frequently rely on short-term payables as a source of refinancing for their daily operations. Additionally, a large inventory quantity and the availability of a trade credit policy may result in a high sales volume. A stock-out risk may be decreased by keeping enough inventory on hand, and letting customers try products out before buying them may encourage them to do so. A business technique called working capital management aims to make sure a firm runs smoothly by keeping an eye on and making the greatest use of its current assets and obligations. Working capital management is the word used to describe management's efforts to effectively manage current assets and current liabilities. The difference between current assets and current liabilities is what we refer to as working capital. To put it another way, effective working capital management is ensuring that the company has enough liquidity to pay short-term expenses and debts.