Dealer Satisfaction

WORKING CAPITAL MANAGEMENT Introduction A firm is required to maintain a residue between liquidity and profitability while conducting its day to day operations. Liquidity is a precondition to ensure that firms be able to meet its short-term obligations and its keep flow can be guaranteed from a profitable venture. The importance of cash as an indicator of continuing monetary health should not be surprise in view of its crucial role within the assembly line.This requires that business must be run both efficiently and profitably. In the process, an asset-liability mismatch may come to pass which may increase firms profitability in the short run but at a risk of its insolvency. On the other hand, as well as much focus on liquidity will be at the expense of profitability and it is common to find finance textbooks begin their working detonating device sections with a discussion of the risk and return tradeoffs inherent in alternative working detonating device policies.Thus, the m anager of a business entity is in a quandary of achieving desired tradeoff between liquidity and profitability in order to maximize the value of a firm. Importance of Working Capital The working keen meets the short-term financial requirements of a business enterprise. It is a trading capital, not retained in the business in a particular form for eight-day than a year. The money invested in it changes form and substance during the normal course of business operations.The need for maintaining an adequate working capital can hardly be questioned. Just as circulation of blood is very necessary in the human body to maintain life, the flow of funds is very necessary to maintain business. If it becomes weak, the business can hardly prosper and survive. Working capital starvation is generally credited as a major name if not the major cause of small business failure in some developed and developing countries. Objectives of Working CapitalIt is becoming more and more difficult to use deb t to finance robotlike engineering firms. Companies in this industry are therefore forced to optimize their capital employed in order to become less dependent on borrowed money. Management of Working Capital While the performance levels of small businesses have traditionally been attributed to general managerial factors such as manufacturing, marketing and operations, working capital management may have a consequent impact on small business survival and growth.The management of working capital is important to the financial health of businesses of all sizes. The amounts invested in working capital are often high in proportion to the total assets employed and so it is vital that these amounts are used in an efficient and effective way. However, there is evidence that small businesses are not very good at managing their working capital. Given that many small businesses suffer from under capitalisation, the importance of exerting tight control over working capital investment is difficu lt to overstate