Impact of Working Capital Policy on Profitability - A Study in Indian Context
Journal Title: Scholars Journal of Arts, Humanities and Social Sciences - Year 2017, Vol 5, Issue 7
Abstract
Working Capital Management concerning with short-term financial decision making has been relatively neglected in the literature of finance. Shortage of funds for working capital has caused many businesses to fail and in many cases, has arrested their growth. Working Capital Management has, thus, become a basis and broad aspect of judging the performance of a corporate entity. Both public sector and private sector have not always given proper attention to the problems of working capital planning. The assured availability of even current assets through budgetary support generally brings to them laxity. Not only is there working capital policy indeterminate, planned levels of individual current assets are not always subjective to rigorous practices. A corporate entity may adopt aggressive working capital policy or it may also be used for financing decisions of the corporate sector in the form of high level of current liabilities in relation to total assets. In view of this backdrop, the present paper is a modest attempt to examine whether working capital policy affects profitability of Tata Steel Ltd., the selected company in India. Keywords: Working capital policy, profitability, aggressive working capital policy, conservative working capital policy, financial decisions, current assets, current liabilities.
Authors and Affiliations
Dr. Pradip Kumar Das
Keywords
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