WORKING CAPITAL MANAGEMENT OF SELECT SAMPLE SUGAR FACTORIES OF PRIVATE SECTOR IN ANDHRA PRADESH
2017
Working capital plays a crucial role in a business enterprise just as the role of heart in
human body. Working capital management is concerned with the problems that arise in
attempting to manage the current assets, the current liabilities and the interrelationship that
exists between them. The goal of working capital management is to manage the firm’s current
assets and liabilities in such a way that a satisfactory level of working capital is maintained.
This is so because if the firm cannot maintain a satisfactory level of working capital, it is likely
to become insolvent and may even be forced into bankruptcy. The current assets should be large
enough to cover its current liabilities in order to ensure a reasonable margin of safety. Each of
the current assets must be managed efficiently in order to maintain the liquidity of the firm while
not keeping too high a level of any one of them. Each of the short-term sources of financing must
be continuously managed to ensure that they are obtained and used in the best possible way.
Sugar industry is the second largest agro based industry in India next to cotton textiles and
contributes significantly to the socio-economic development of rural population. Sugarcane is
the most important cash crop it is bound to play a greater role in the Indian economy in the years
to come by offering a stable income to the farmers by way of cane price by providing
employment to rural masses, by realizing excise duty cane cess/ purchase tax and foreign
exchange earnings.
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