Management of current assets, current liabilities and their relationship constitutes working capital management of an enterprise. A business organization has to be conscious that inadequate working capital can disrupt its operations leading illiquidity. At the same time excessive working capital is also not desirable since it adversely affects profitability. This paper looks at different facets of working capital management. The issues addressed include relationship between CAs and CLs, the financing of working capital, and way of dealing with excess or shortage of working capital, etc. The study is based on an analysis of 13 year period data from 1991 to 2003 of 137 public sector enterprises. While secondary data was taken from the Prowess Database of CMIE, the primary data was collected with a questionnaire-based survey.
Working capital management, public enterprises, private enterprises, acid test ratio
