Working Capital Management in Power Distribution Companies in Andhra Pradesh

Therefore, adequate working capital is required for uninterruption of organization activities. In this paper an attempt has been made to the study the Liquidity position, structure of working capital and financing of working capital. Efficient management of working capital is important for the success of enterprise, whereas inefficient management of working capital may be caused due to various problems such as reducing of liquidity position, losing of profits and utility that leads to winding up of company. Current ratio of two power distribution companies is less than standard norm, indicating that liquidity position is not satisfactory. It is observed that inventory turnover ratio of two power distribution companies is high and inventory holding period is low, impels that inefficiency in conversion of stock in to sales. The working capital turnover ratio of both power distribution companies is low, indicating over investment current assets.