Working Capital Management Research Paper

848 Words4 Pages

1. INTRODUCTION
Efficient working capital management demands the firm to operate with appropriate amount of Working Capital, the exact amount varying from firm to firm and depending, among other things, on the nature of industry. Working capital management includes both establishing working capital policy and then the day-to-day control of cash, inventories, receivables, accruals, and accounts payable. Each business puts up working capital for its survival. Working capital is vital for uninterrupted business operations. Due to its significant effect on the profitability, risk and subsequently value of the firm, working capital management gets much importance (Smith, 1980).It is needed by a firm to keep up its liquidity, dissolvability and …show more content…

As concluded by O'Byrne (1996), "EVA, unlike NOPAT (net operating profit after taxes) or other earnings measures like net income or earnings per share, is systematically linked to market value. It should provide a better predictor of market value than other measures of operating performance." Uyemura, et al. (1996) also put forward the similar findings. Up to the best knowledge of the researcher, Economic Value Added is yet not explored in relationship with working capital management in case of Pakistan. Therefore, this research is needed because it is the important dimension particularly in Pakistan. To study the relationship of EVA with working capital management tells about the directions and sensitivity how to manage our working capital to gain a better performance and value creation by the firms. It is also needed for the advancement of the research and to draw the conclusion after conducting the result in the same …show more content…

Authors are agreed to advance their short term goals and need to achieve short term aims in planning such prototypes. Their study setup a strong reference point for long run goals with short run goals. According to the conclusions of that study results of those firms is that sales is maintained by cash or cash equivalents and short tenure financial objectives. Another fascinating result of conclusions is that short time objectives not settle long run objectives of firm, it seems a abnormality of exercise from the main concept. Ricci and Vito (2000) conduct a study for main 200 UK organizations and makes an exploratory examination on WCM hones on universal perspectives. The exploration paper advances the thought of universal business and of the expanding number of US firms getting into worldwide business. This has opened new research openings from the perspective truth of worldwide money related administration. The creators allude to Soenen and Aggarwal (1987) who express that "Next to no is thought about real corporate practices in the regions of money and remote trade administration, especially outside the

Open Document