scholarly journals Management of current assets in the context of increasing the Enterprise’s Profitability

2015 ◽  
Vol 2 ◽  
pp. 27
Author(s):  
Iluta Arbidane
Keyword(s):  
Optimum Level ◽  
Regression Equations ◽  
Capital Management ◽  
Working Capital ◽  
Short Term ◽  
Working Capital Management ◽  
Essential Condition ◽  
Efficient Management ◽  
A Company ◽  
Made In

<p class="R-AbstractKeywords">In order to ensure the financial sustainability of companies under current economic conditions successful management of current assets is crucial. In practice it is quite often observed that the decisions related to current assets management in Latvian companies are made in the short-term aspects without making analysis. Efficient management of working capital is an essential condition of rise in profitability of a company.  Potentialities of working capital management in the context of efficient running of business have not been studied in Latvia up until now. The main aim of this article is to examine the effect of working capital on profitability of Latvian companies. The results of the research that has been performed in relation to Latvian enterprises confirm the existence of a correlation between components of working capital and profitability. The developed regression equations meant for forecasting profitability of a company applying working capital management methods can be used by Latvian enterprises. It follows that managers of an enterprise can forecast indexes characterizing profit, managing components of working capital and maintaining it on the optimum level</p>

scholarly journals The Impact of Working Capital Management on Firm Profitability: Empirical Evidence from the Polish Listed Firms

2020 ◽  
Vol 14 (1) ◽  
pp. 9
Author(s):  
Sorin Anton ◽  
Anca Afloarei Nucu
Keyword(s):  
Empirical Evidence ◽  
Ordinary Least Squares ◽  
Optimum Level ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Listed Firms ◽  
Firm Profitability ◽  
Break Even Point ◽  
The Impact

The purpose of this study is to investigate the relationship between working capital and firm profitability for a sample of 719 Polish listed firms over the period of 2007–2016. The scarcity of empirical evidence for emerging economies and the importance of working capital efficiency motivate the research on the working capital–financial performance relationship. The paper adopts a quantitative approach using different panel data techniques (ordinary least squares, fixed effects, and panel-corrected standard errors models). The empirical results report an inverted U-shape relationship between working capital level and firm profitability, meaning that working capital has a positive effect on the profitability of Polish firms to a break-even point (optimum level). After the break-even point, working capital starts to negatively affect firm profitability. The study brings theoretical and practical contributions. It extends and complements the literature on the field by highlighting new evidence on the non-linear interrelation between working capital management (WCM) and corporate performance in Poland. From the practitioners’ perspective, the results highlight the importance of WCM for firm profitability.

A Study on Working capital Management in Hindustan Petroleum Corporation Limited

2021 ◽  
pp. 164-168
Author(s):  
Sruthi B ◽  
Rashmi R
Keyword(s):  
Annual Report ◽  
Pearson Correlation ◽  
Secondary Data ◽  
Effective Management ◽  
Capital Management ◽  
Working Capital ◽  
Short Term ◽  
Working Capital Management ◽  
The Past ◽  
The Relationship

Working capital management is important for every organization as it refers to the effective management of current assets and current liabilities. The aim is to make sure that the firm is capable to continue its operations and it has sufficient cash flow to satisfy both maturing short-term debt and upcoming operational expenses. In this paper, an attempt has been made to study the management of working capital in Hindustan Petroleum Corporation Limited, a leading public sector enterprise in India over a period of 10 years (That is from 2009-10 to 2018-19). The paper also attempts to study the components of working capital and analyze the relationship between liquidity and profitability of HPCL. The study is based on secondary data collected from annual report of HPCL for the past 10 years, Pearson correlation and regression model are used for this purpose. From the study it is found that there is a significant relationship between liquidity and profitability.

scholarly journals A Evaluation on the Working Capital Management

2019 ◽  
Vol 8 (2S8) ◽  
pp. 736-739
Keyword(s):  
Trend Analysis ◽  
Annual Reports ◽  
Optimum Level ◽  
Ratio Analysis ◽  
Capital Management ◽  
Working Capital ◽  
Operating Cycle ◽  
Working Capital Management ◽  
Restricted Region ◽  
Secondary Objective

This assignment deal with the “A Study on the Evaluation of Working Capital Management with reference to SHILLONG URBAN COOPERATIVE BANK.' Working Capital Management is concerned with the issues that occur in the attempt to handle present assets, present liabilities and the interrelationship between them. The goal of Working Capital Management is to manage the current assets and current liabilities of the firm in such a way that the satisfactory level of Working Capital is mentioned. Current assets should be big enough to cover their present liabilities to guarantee a decent security margin. The primary goal of this research is to study the management of working capital and the efficiency of handling a working capital in a business. The secondary objective of this research is to study the optimum level of the company's current assets and current liabilitiesTo study the liquidity situation through different working capital associated ratios, to study economic performance using trend analysis instruments. The study of working capital management is important because, unless the working capital is managed effectively, effectively monitored, properly planned and periodically reviewed at regular intervals to remove bottlenecks, if any, the company can not gain. profits and increase its turnover. Working Capital research is based on instruments like Trend Analysis, Ratio Analysis, Operating Cycle, etc. Further the research is based on the Annual Reports of the last 5 years. And even factors such as the assessment of rivals, the assessment of the sector was not regarded during the preparation of this project. The secondary technique of information collection is used for this research. The purpose of the information compilation was to study the company's management of working capital. Working capital in the form of current assets is needed to cope with the issue resulting from the absence of instant realization of money against sold products. Therefore, adequate working capital is needed to maintain sales activity.Efficient management of working capital involves firms to work with a certain quantity of net working capital, the precise quantity varying from company to company and depending, among other things; on the nature of the firms. This research has some constraints such as restricted information, restricted period, restricted region, and the length of the research is very small.

scholarly journals Working Capital Management Practices

2019 ◽  
Vol 8 (2S8) ◽  
pp. 156-161
Keyword(s):  
Management Practices ◽  
Secondary Data ◽  
Project Work ◽  
Capital Management ◽  
Working Capital ◽  
Short Term ◽  
Good Opportunity ◽  
Working Capital Management ◽  
Money Flow ◽  
The Relationship

VJ Engineers is one of the popular organizations in Chennai. Seeing the good opportunity to study financial systems and practices of VJ Engineers, it is relatively important to take up assignment on ‘WORKING CAPITAL MANAGEMENT IN VJ ENGINEERS’. During the project work, it is being analyzed the working capital position of this organization. [1],[ 3],[5] Decisions relating to working capital and short term financing are referred to as working capital management. These involve managing the relationship between a firm's short-term assets and its short-term liabilities. The goal of Working capital management is to ensure that the firm is able to continue its operations and that it has sufficient money flow to satisfy both maturing short-term debt and upcoming operational expenses.The study of working capital management is very helpful for the organisation to know its liquidity position. The study is relevant to the organization to know the day to day expenditure. This study is relevant to give an idea to utilise the current assets.This study is also relevant to the student as they can use it as a reference. This report will help in conducting further research. Other researcher can use this project as secondary data uncovering of PDA incorporation in effects on police reports.

Working Capital Management in Select Indian Pharmaceutical Companies

2014 ◽  
pp. 1-11
Author(s):  
Debasish Sur ◽  
Sumit Kumar Maji ◽  
Deep Banerjee
Keyword(s):  
Pharmaceutical Industry ◽  
Competitive Environment ◽  
Common Phenomenon ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Efficient Management ◽  
The World ◽  
Tools And Techniques ◽  
Indian Pharmaceutical Industry

The Indian pharmaceutical industry is the fifth largest pharmaceutical industry in the world in terms of volume and the fourteenth largest in value terms. There have been sevaral notable changes in the scenario of Indian pharmaceutical industry after the signing of GATT (now WTO). The mergers, acquisitions, and takeovers at both national and international levels have become a common phenomenon in this industry. In today's challenging and competitive environment, efficient management of working capital is an integral component of the overall strategy to create shareholders' wealth. So, the task of designing appropriate strategies for managing working capital in accomplishing the objective of maximizing shareholders' wealth of companies in the Indian pharmaceutical industry is of prime importance. In this backdrop, the chapter seeks to analyze the working capital management of ten selected companies in the Indian pharmaceutical industry during the period 1996-97 to 2010-11. While satisfying the objective of the study, relevant statistical tools and techniques have been applied at appropriate places.

scholarly journals The Impact of Working Capital Management on Profitability of Croatian Software Companies

2018 ◽  
Vol 21 (1) ◽  
pp. 47-66 ◽  
Author(s):  
Dina Korent ◽  
Silvije Orsag
Keyword(s):  
Optimal Level ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Working Capital Management ◽  
Macroeconomic Conditions ◽  
Software Companies ◽  
Software Firms ◽  
The Impact ◽  
A Company

Abstract The idea that working capital management impacts profitability and risk of a company is generally accepted and in last 10-15 years has acquired a substantial interest. Accordingly, from the aspect of the measure of efficiency of working capital management, the objective of this paper is to evaluate working capital management impact on profitability of Croatian software companies. This impact was examined using descriptive and correlation as well as panel regression analysis for six-year period (2008-2013). The results show that after controlling for characteristics of the company and macroeconomic conditions working capital management significantly affects the profitability of Croatian software firms. Moreover, the results imply the existence of a nonlinear, concave quadratic relationship between the net working capital and return on assets. This suggest the existence of an optimal level of net working capital that balances costs and benefits and maximizes profitability of analysed companies.

scholarly journals Importancia de la administración eficiente del capital de trabajo en las Pymes. // Importance of efficient management of working capital in SMEs.

Ciencia Unemi ◽  
2017 ◽  
Vol 10 (23) ◽  
pp. 30 ◽  
Author(s):  
Juanita García Aguilar ◽  
Sandra Galarza Torres ◽  
Aníbal Altamirano Salazar
Keyword(s):  
Latin American ◽  
Early Years ◽  
Working Capital ◽  
Short Term ◽  
Cash Conversion Cycle ◽  
Documentary Analysis ◽  
Efficient Management ◽  
Scientific Papers ◽  
A Company ◽  
Theoretical Foundations

En este trabajo se analiza la importancia de una eficiente administración del capital de trabajo, como estrategia para lograr la operatividad de las Pymes y su permanencia en el tiempo. El capital de trabajo es el efectivo mínimo que toda empresa necesita para ejecutar con normalidad sus actividades operativas. Una gestión adecuada del mismo, permite contar con liquidez necesaria para cubrir las obligaciones de corto plazo, como resultado de la eficiente aplicación del ciclo de conversión del efectivo. Para esto, se aplicó una metodología de análisis documental tomando como referencia fuentes secundarias de investigación, tales como libros y artículos científicos. A partir de lo anterior, se analizó los fundamentos teóricos del capital de trabajo, sus métodos de cálculo y una revisión de investigaciones sobre la administración del capital de trabajo en Pymes latinoamericanas. Como resultado se determinó que el capital de trabajo es una herramienta financiera a la que todo administrador debe prestarle atención y dedicarle tiempo, debido a que determina la supervivencia de una empresa durante los primeros años de su existencia. Por otro lado, existen algunos métodos de cálculo para estimar el capital de trabajo, cada uno tiene sus características esenciales y su aplicación, dependen de la actividad a la que se dedique la entidad. ABSTRACTThis paper aims to analyze the importance of an efficient administration of working capital, as a strategy to achieve the operation of SMEs and their permanence in time. Working capital is the minimum cash that every company needs to execute its operating activities normally. Proper management of the asset enables to have the necessary liquidity to cover short-term obligations, as a result of the efficient application of the cash conversion cycle. For this, a methodology of documentary analysis was applied taking as reference secondary research sources, such as books and scientific papers. Based on the above, the theoretical foundations of working capital, their methods of calculation and a review of research on the management of working capital in Latin American SMEs were analyzed. As a result, it was determined that working capital is a financial tool that every manager must pay attention and spend time, because it determines the survival of a company in the early years of its existence. On the other hand, there are some calculation methods to estimate working capital, each has its essential characteristics and its application depends on the activity to which the organization is committed.

scholarly journals Working Capital Management Efficiency of Cement Sector of Pakistan

2011 ◽  
Vol 2 (5) ◽  
pp. 223-235 ◽  
Author(s):  
Talat Afza
Keyword(s):  
Efficiency Index ◽  
Total Efficiency ◽  
Target Level ◽  
Capital Management ◽  
Working Capital ◽  
Short Term ◽  
Working Capital Management ◽  
Financial Decisions ◽  
Capital Efficiency

The corporate finance literature has traditionally focused on the study of long-term financial decisions. Researchers have particularly examined investments, capital structure, dividends or company valuation decisions, among other topics. However, short-term assets and liabilities are important components of total assets and needs to be carefully analyzed. Management of these short-term assets and liabilities warrants a careful investigation since the working capital management plays an important role for the firm’s profitability and risk as well as its value. It requires continuous management to maintain proper level in various components of working capital i.e. cash, receivables, inventory and payables etc. The present study is an attempt to evaluate the efficiency of the working capital management of cement sector of Pakistan for the period 1988-2008. Instead of employing the traditional ratios; working capital efficiency has been measured in terms of utilization index, performance index and total efficiency index as suggested by Bhattacharya (1997). This paper also tests the speed of achieving the target level of efficiency by an individual firm during the period of study using industry norms as the target level of efficiency. Findings of the study indicate that the cement sector as a whole did perform well during the study period.

scholarly journals ANALISIS OPTIMALISASI MODAL KERJA PT UNILEVER INDONESIA TBK

2021 ◽  
Vol 11 (1) ◽  
pp. 048
Author(s):  
Fera Maulina
Keyword(s):  
Raw Materials ◽  
Secondary Data ◽  
Financial Statements ◽  
Capital Requirements ◽  
Capital Management ◽  
Working Capital ◽  
Short Term ◽  
Working Capital Management ◽  
Operational Process ◽  
The Real

ABSTRACT This study aims to determine working capital requirements and optimization of working capital at PT Unilever Indonesia Tbk. The form of research used is descriptive and uses secondary data obtained from PT Unilever Indonesia Tbk's 2015-2019 financial statements and other sources obtained from literature studies by studying books and journals that are related to the problem under study. The results showed that (1) PT Unilever Indonesia Tbk's need for working capital in 2016-2019 tends to increase. When compared with the available working capital (current assets), PT Unilever Indonesia is experiencing a lack of working capital to finance the company's operations. This lack of working capital will certainly cause PT Unilever Indonesia Tbk to experience liquidity problems, which is the inability to pay short-term obligations on time. Companies will seek credit as a source of funds in order to increase the fulfillment of current assets wealth needs in order to buy raw materials and even pay for employee salaries and other expenses. (2) PT Unilever Indonesia Tbk's optimal working capital in 2015-2018 tends to increase. The real working capital that is in the company is not optimal where the real working capital is not the same as the optimal working capital obtained. Real working capital less than optimal working capital will hamper or disrupt the smooth production or operational process because the company lacks funds. Even though the existing real working capital is not optimal, the amount obtained is not much lower than the optimal working capital.  Keywords: working capital management, workong capital requirements, optimization of working capital. ABSTRAK Penelitian ini bertujuan untuk mengetahui kebutuhan modal kerja dan optimalisasi modal kerja pada PT Unilever Indonesia Tbk. Bentuk penelitian yang digunakan adalah deskriptif dan menggunakan data sekunder yang diperoleh dari laporan keuangan PT Unilever Indonesia Tbk tahun 2015-2019 dan sumber lain yang diperoleh dari studi pustaka dengan mempelajari buku dan jurnal yang berkaitan dengan masalah yang diteliti. Hasil penelitian menunjukkan bahwa (1) Kebutuhan modal kerja PT Unilever Indonesia Tbk tahun 2016-2019 cenderung meningkat. Jika dibandingkan dengan modal kerja yang tersedia (aset lancar), PT Unilever Indonesia mengalami kekurangan modal kerja untuk membiayai operasional perusahaan. Kekurangan modal kerja ini tentunya akan menyebabkan PT Unilever Indonesia Tbk mengalami kesulitan likuiditas, yaitu ketidakmampuan membayar kewajiban jangka pendek tepat waktu. Perusahaan akan mencari kredit sebagai sumber dana guna meningkatkan pemenuhan kebutuhan kekayaan aset lancar guna membeli bahan baku bahkan membayar gaji karyawan dan biaya lainnya. (2) Modal kerja optimal PT Unilever Indonesia Tbk pada 2015-2018 cenderung meningkat. Modal kerja riil yang ada di perusahaan belum optimal dimana modal kerja riil tidak sama dengan modal kerja optimal yang diperoleh. Modal kerja riil yang kurang dari modal kerja optimal akan menghambat atau mengganggu kelancaran proses produksi atau operasional karena perusahaan kekurangan dana. Meskipun modal kerja riil yang ada belum optimal, namun jumlah yang diperoleh tidak jauh lebih rendah dari modal kerja optimal. Kata kunci: pengelolaan modal kerja, kebutuhan modal kerja, optimalisasi modal kerja

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