An Empirical Study of Cash Management Practices with reference to Construction Sector in Visakhapatnam District of Andhra Pradesh, India

Abstract

Cash management plays a significant role in improved profitability of construction businesses. The firms can achieve optimal management of cash by making the trade-off between profitability and liquidity. The construction industry is one of the most complex and multi-purpose economic sectors. Therefore, a well designed and implemented cash management practice is expected to contribute positively to the creation of a firm’s value. A firm is required to maintain a balance between liquidity and profitability while conducting its day to day operations. Effective management of the cash positively influences the firms’ financial position and also have a significant effect on the profitability of the building construction firms. The paper analyses the efficiency of cash management practices in building construction firms.