Working capital management of organics industries in Biratnagar
Date
2024
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Abstract
This study delves into the intricate relationship between current assets and current liabilities at
Premier Organic Pvt Ltd. The primary focus is on optimizing working capital management,
addressing overall company dynamics. Utilizing financial tools and statistical analysis, key
metrics such as current ratio, net working capital, inventory conversion period, debtors collection
period, payable deferral period, and cash conversion cycle are meticulously examined. The study
acknowledges its limitations, including a narrow scope confined to working capital management
and reliance on annual reports for data. Nevertheless, the research endeavors to offer insights into the efficiency of premier organic's working capital practices, presenting a holistic
perspective into the efficiency of premier Organic working capital practices, presenting a holistic
perspective on the company's financial health
The study revealed a negative correlation between Inventory Conversion Period (ICP) and return
on net assets (ROA) of Nigerian conglomerate companies. The study recommends that
companies should sufficiently plan and control their operations, amend the shortfalls whenever
identified, consider the principles of finance in their decision making, utilize the services of
professionals in complex business areas and perform periodic stock taking. That there is an
insignificant negative impact of the inventory conversion period (ICP) and receivable conversion
period (RCP) and an insignificant positive impact of the payables deferral period (PDP). Thus, this paper concludes that Nepalese non-financial firm can increase their profitability by decreasing the current ratio (CR) and debt ratio (TDTA) and increasing the ratio of current assets to total assets (CATA).
Keywords: Cash Conversion Cycle, Inventory Conversion Period, Payable Deferral Period,
Return on Assets
Description
Keywords
Cash conversion cycle, Payable deferral period