Analysis of Working Capital Management in an Electrical Industry

Abstract

Working capital is concerned to be the lifeblood and controlling nerve centre of the business. To run business effciently, an adequate amount of working capital is very essential. Thus working capital management forms an integral part of over all corporate management The profitability and solvency are two vital aspects of the working capital management. The survival and growth of the company thus depends upon the ability to meet the profitability and solvency.This study concentrates on the analysis of liquidity and solvency position of the Transformers and Electrical Kerala Ltd (TELK), effectiveness in utilization of various components of working capital, to analyze the type of working capital policy followed by the organization, analyze the sensitivity of return on investment to changes in the levels of current assets; analyze the correlation between the important components of working capital.