Asian Journal of Management

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Management of Working Capital Components among Select Automobile Companies in India


Affiliations
1 Annamalai University, Annamalainagar, Chidambaram – 608 002, Tamilnadu, India
2 Department of Commerce, Annamalai University, Annamalainagar, Chidambaram – 608 002, Tamilnadu, India
     

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This paper analyses the management of working capital components of select automobile companies in India. For this purpose two leading manufacturers of both passenger and commercial vehicles were selected such as, Tata motors limited and Mahindra and Mahindra limited. This study used secondary data for the study period of nine years from 2003-04 to 2011-12. This study used simple percentage and ratio for analyzing the data. It analysed inventory, receivables and payables and cash management separately. The study found efficient receivables and payables management by both the companies. The study found negative cash conversion cycle during all the years of the study period of both the companies, it was possible because very short debtors' collection period and inventory conversion period and long creditors' payment period. The study concluded that both the companies efficiently managed their working capital components.

Keywords

Working Capital, Inventory, Receivables, Payables, Work-in-progress
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  • Management of Working Capital Components among Select Automobile Companies in India

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Authors

L. Ganesamoorthy
Annamalai University, Annamalainagar, Chidambaram – 608 002, Tamilnadu, India
R. Rajavathana
Department of Commerce, Annamalai University, Annamalainagar, Chidambaram – 608 002, Tamilnadu, India

Abstract


This paper analyses the management of working capital components of select automobile companies in India. For this purpose two leading manufacturers of both passenger and commercial vehicles were selected such as, Tata motors limited and Mahindra and Mahindra limited. This study used secondary data for the study period of nine years from 2003-04 to 2011-12. This study used simple percentage and ratio for analyzing the data. It analysed inventory, receivables and payables and cash management separately. The study found efficient receivables and payables management by both the companies. The study found negative cash conversion cycle during all the years of the study period of both the companies, it was possible because very short debtors' collection period and inventory conversion period and long creditors' payment period. The study concluded that both the companies efficiently managed their working capital components.

Keywords


Working Capital, Inventory, Receivables, Payables, Work-in-progress

References