Working capital management in electronics industry in India

INTRODUCTION

Working capital has been described as the lifeblood of

a business enterprise. It denotes the funds which are

required for the day-to-day operations of the enterprise. It

represents the capital invested in current assets viz.,

cash, receivables, and inventory. In many business

enterprises working capital forms, a substantial portion of

the total capital employed. Fixed capital in the form of

productive facilities cannot be utilized fully without an

adequate supply of motive power i.e. working capital. The

amount of working capital in a business should be neither

more nor less than what is required. Inadequate working

capital means a shortage of raw materials and other inputs

resulting in underutilisation of machinery, ultimately

leading to the failure of business and frustration of

objectives through lack of funds.