Receivable management of Indian Cement Industry in A Changed Scenario

A firm's profitability is determined partly by way of its working capital management. An efficient management of working capital will yield significant results and its neglect can be highly dangerous to any firm. The Cement Industry is one of the fast growing industries in India. In 2009, there was an increase of 2.9% in sales of cement, when compared to the last two years of sales. This shows that the construction work in the country, especially the usage of cement in the housing industry, is on the increase. As cement industry is capital intensive and it has several players, it is really worth asking if these companies are efficiently managing their receivables. A sample of 10 companies were selected for this Study on the basis of high sales turnover and data for this study were collected for a period from 2001 to 2008 to analyze whether the sample companies really managed their receivables or not. The study used Ratio Analysis and ANOVA as tools to find out the efficiency of Receivable Management. Finally, it could be concluded that the cement industry was efficiently managing their receivables and based on the future sales forecast, the sales turnover and profit will be good in the near future.