Authors: Apeksha Hule, Dr.Sachin Wadekar
Abstract: Working Capital Management plays a crucial role in determining the financial health and operational efficiency of an organization. This study focuses on analyzing the impact of working capital management on the liquidity position of firms. It examines key components such as cash, inventory, receivables, and payables, and how their effective management influences short-term financial stability.The research aims to evaluate the relationship between working capital practices and liquidity by using financial ratios like current ratio, quick ratio, and cash conversion cycle. Proper management of working capital ensures that a firm maintains adequate liquidity to meet its obligations while also improving profitability.The study concludes that efficient working capital management significantly enhances liquidity and overall financial performance. Poor management, on the other hand, can lead to cash shortages, increased costs, and financial distress. Thus, maintaining an optimal level of working capital is essential for the smooth functioning and growth of any business.
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