WORKING CAPITAL MANAGEMENT OF SELECT SAMPLE SUGAR FACTORIES OF PRIVATE SECTOR IN ANDHRA PRADESH

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.