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PROJECT SYNOPSIS
A Study on “Impact of Working Capital Management on the firms profit and their liquidity position”
By
NITIKA DUBEY
ENROLLMENT NO.10VWCMA034
For partial fulfillment of the requirements of final year MBA curriculum of Two years Full time MBA Programme.
Submitted to:
PROF. Pratibha RajSTATEMENT OF THE PROBLEM:
Impact of Working Capital Management on the firms profit and their liquidity position.
INTRODUCTION:
Working capital or circulating capital indicates circular flow of funds in the day-to-day or routine
activities of business. The most important reason why most people look at a balance sheet is to
find out a company's Working Capital (or "current") position. It reveals more about the financial
condition of a business than almost any other calculation. It tells us what would be left if a
company raised all of its short term resources, and used them to pay off its short term liabilities.
The more working capital, the less financial strain a company experiences. By studying a
company's position, one can clearly see if it has the resources necessary to expand internally or if it
will have to turn to a bank and take on debt.
OBJECTIVE OF THE STUDY:
This study tells what the need of working capital for every organization is.
This study tells proper level of current assets and current liabilities is to be maintained.
This study tells how the adequate or inadequate of working capital affect the company’s
return and liquidity position
SIGNIFICANCE OF THE STUDY:
This study tells how the company’s risk, return and share price are affected by the working
capital
This study tells about the level of current assets have to be maintained.
This study tells how to manage optimum level of working capital.
SCOPE OF THE STUDY:
How to manage working capital efficiently and effectively?
This study tells about short term sources of finance and how to use it effectively.
This study helps to manage liquidity position
LIMITATION OF THE STUDY:
This study is restricted to the information available from the published financial statements.
Lack of availability of primary data.
RESEARCH METHODOLOGY:
My research will include:
Primary data: No primary data
Secondary Data: News Papers, company records, internet, Reports, published Balance sheet.
Tools: Bar Diagrams, tabulation
Sample Size: last five years balance sheets
CONCLUSION:
A firm must have adequate working capital, i.e., as much as needed the firm. It should be neither excessive nor inadequate. Both situations are dangerous. Excessive working capital means the firm has idle funds which earn no profits for the firm. Inadequate working capital means the firm does not have sufficient funds for running its operations.
BIBLIOGRAPHY:
I.M.Pandey – Financial Management
www.google.com
www.rbi.com