INTRODUCTION

Working capital can be regarded as the circulatory system of any business.

The success and efficiency of business enterprise depends largely on its
ability to manage its Working capital. Even in a well-established business
operation, needs careful attention for effective management of Working
capital. Working capital is one of the important facts of a firm overall
financial management. Whatever be the size of a business, Working capital
is its life-blood.

Working capital management is concerned with the problems that

arise attempting to manage the current assets, current liabilities and the inter
relationship that exist between them.

The current assets refers to those assets, which in ordinary course

of business can be converted in to cash with in one year with out under
going a diminution in value. Current liabilities are those liabilities, which are
intended at there inception, to be paid in ordinary current of business, with in
a year out of current assets.

The basic objective of working capital management is to put

current assets to optimum use for overall profitability of a business
enterprise. If the firm can’t maintain a satisfactory level of working capital it
is like to become insolvent and may even be forced to bankruptcy.

The effective management of working capital requires both

medium term planning and intermediate reactions to changes in forecast and
conditions.

The current assets should be managed in such a way that is should

cover it’s current liabilities in order to ensure a reasonable margin of safety
therefore the interaction, between the current assets and current liabilities it
is mange them of the theory of working capital management
 IMPORTANCE OF STUDY

The study helps to the following groups.

 The study provides an insight in to various aspects of a study on

working capital management hence the company changes in the
policy relating to it.

 Studies of these types are more useful academicians and schedule to

make for insights in to the various aspects of the topic working capital
management in the other similar organization.

 Study of this type is also useful to competitors to make necessary

steps to improve working capital management.

LIMITATIONS OF THE STUDY

The study suffers from the following limitations

 Some aspects of financial information were not available because of

the confidentiality of (ysr).

 The study was conducted with the data available and analysis was
made accordingly.

 The e information provided by the company is not exhaustive. Hence

the analysis is also restricted as for the information available.

 The period covered in the study is limited only five years

 The study is confined to the working capital management.

 Time is also not sufficient to analyse the data completely