Title: Estimation of Working Capital on the Basis of Sales and Vice-Versa (A Case Study of IFFCO Ltd.)


Volume 6 Issue 2 Year 2016

Authors:

Vikas Shrotriya

vikas_shrotriya@yahoo.co.uk
Department of Management Studies, Swami Keshvanand Institute of Technology, Vivekanand Global University, Jaipur(INDIA)

Pages: 88-91


Abstract:

Any movement in working capital (WC) must get reflected in the sales of organization. Current assets and current liabilities must be managed effectively in order to achieve financial discipline. Management of WC in synchronization with sales is of immense importance for the purpose of cost effectiveness and thus profit maximization. Impressive WC ratios are not the only indicators of efficient WC management. There should be positive and strong correlation between WC and sales, so that any increase or decrease in one is supported by the same in other. Efficient WC management should have least deviations in projected and actual values of WC and sales.

This research article discusses the degree of association between WC and sales of IFFCO Limited and highlights the deviations in working capital and sales as a comparison between the projected and actual values of working capital and sales for ten financial years, from 2006-07 to 2015-16 .

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