Change In the Working Capital Requirements: In the Textile Industry

The working capital requirements of concern depend upon a large number of factors such as nature and size of business. The character of their operations, the length of production cycles, the rate of stock turnover and the state of economic situation. In manufacturing business, the requirements of working capital increases in direct proportion to length of manufacturing process. Longer the process period of manufacture, larger is the amount of working capital required. The longer the manufacturing time, the raw materials and other supplies have to be carried for a longer period in the process with progressive increment of labour and service costs before the finished product is finally obtained. Working capital in general practice refers to the excess of current assets over current liabilities. Management of working capital therefore is concerned with the problems that arise in attempting to manage the current assets, the current liabilities and the inter-relationship that exists between them. The purpose of this study is to examine the changes in the working capital requirements in the textile industry.