Indian Journal of Finance
By: Associated Management Consultants (P) Ltd.Single Issue
Single Issue
- IJF-Aug12-Article3-WORKING CAPITAL STRUCTURE AND LIQUIDITY ANALYSIS: AN EMPIRICAL RESEARCH OF GUJARAT TEXTILES MANUFACTURING INDUSTRY
- Price : 80.00
- Published on March 27, 2013
- Associated Management Consultants (P) Ltd.
- Issues 356
- Language - English
- Published daily
About this issue
The structure of working capital and liquidity analysis plays a vital role in the process of wealth maximization of shareholders. The firms should, therefore, make wise investment in various components of current assets. Having made an attempt to study the effectiveness of structuring the working capital, the study revealed that the sample companies on an aggregate basis invested most of their funds in inventories, followed by loans and advances and trade receivables. The firms held very insignificant amount of funds in cash and near cash assets. The study also indicated that the variation between current assets turnover and working capital turnover was quite high across the industry. However, the sample companies had good current ratios, which also imply the sound liquidity position of sample companies. The hypothesis testing done through one-way ANOVA revealed that the average current ratios, the average quick ratios, the average ratios of current assets to total assets, the average ratios of current assets to sales, the average current assets turnover ratios and the average working capital turnover ratios of sample companies differ significantly. Keywords: Working Capital, Wealth Maximization, Current Ratio, Quick Ratio, Liquidity Position and Analysis of Variance (ANOVA)
About Indian Journal of Finance
Indian Journal of Finance, a source of sophisticated analysis of developments in the rapidly expanding world of finance, is a monthly journal with topics ranging from corporate to personal finance, insurance to financial economics and derivatives.