A STUDY OF MANAGING LIQUIDITY

Abstract

Since privatisation, to ensure swift economic development it was deemed essential that a sound steel production program on a formidable basis must be formulated. Accordingly, the private sector has set up many more integrated steel plants and enhanced the existing plants to increase current production capacity. To some extent the priority given by the country failed to flourish due to poor capacity, under-utilisation and poor consumption. Working capital is accountable for poor capacity, under-utilisation and poor consumption. The competence of the working capital in terms of short-term liquidity is of foremost significance in the case where we examine performs and guiding principle presently overcoming in an industry with a view to finding out whether they are reasonable or require enhancement. The effectiveness of working capital is of crucial importance if short-term liquidity position as well as short-term solvency position is very acceptable and at the same time, if judgement is made with its standard or benchmark. The overall efficiency is vital from the viewpoint of short-term liquidity and at the same time proper plane of profitability is required for the business enterprises. Consequently, the affiliation between short-term liquidity and profitability is one of the most imperative areas necessitating management analysis. Keeping this in view, a study of liquidity management of the selected private sector steel companies is undertaken in the present work.