International Journal of Statistics and Actuarial Science

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The Working Capital and Its Ratios: A Qualitative Study

Received: Mar. 10, 2017    Accepted: Mar. 27, 2017    Published: Apr. 13, 2017
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Abstract

Working capital is necessary tool for a financial economics for a decision making. Unsuitable management of WC i.e. too low or too high of WC may suffer a financial firm, so a proper and sustainable WC is a key to smooth inflow of profit. Mainly WC refers the Current assets of a firm. Currents assets are Inventory, Cash, Receivables, Cash equivalents etc. It is necessary component of a financial firm because WC directly affects the liquidity of a financial firm. In this paper we calculated the different ratios such as Liquidity ratios, Profitability ratios and Leverage ratios. We used the secondary data of XYZ to calculate the above ratios in Excel that are mentioned.

DOI 10.11648/j.ijsas.20170101.15
Published in International Journal of Statistics and Actuarial Science ( Volume 1, Issue 1, February 2017 )
Page(s) 24-30
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Working Capital, XYZ Firm, Liquidity Ratio, Profitability Ratio and Leverage Ratio

References
[1] Anderson, Hershal, and others. Financial Accounting and Reporting. 4th ed. Medford, NJ: Malibu Publishing, 1995.
[2] Anthony, Robert N., and others. Accounting: Text and Cases. 9th ed. NP: McGraw-Hill Higher Education, 1994.
[3] Diamond, Michael A. Financial Accounting. 4th ed. Cincinnati: South-Western Publishing, 1995.
[4] Eskew, Robert K., and Daniel L. Jensen. Financial Accounting. 5th ed. New York: McGraw-Hill, 1995.
[5] Solomon, Lanny M., Larry M. Walther, and Richard J. m Vargo. Financial Accounting. 3rd ed. New York: West Publishing, 1992.
[6] Markowitz, H. M., "Portfolio Selection", The Journal of Finance, Vol. 13, No. 1, March 1952.
[7] Sharpe, W., "A Simplified Model for Portfolio Analysis", Management Science, Vol. 9, No. 2, January 1963.
[8] Roll, R., "A Critique of the Asset Pricing Theory Tests", Journal of Financial Economics, Vol. 4, March 1977.
[9] Firth, M., The Valuation of Shares and the Efficient Markets Theory, Macmillan (London) 1977.
[10] Ross, SA., "Arbitrage Theory of Capital Asset Pricing", Journal of Economic Theory, Vol. 13, December 1976.
[11] Roll, R. and Ross, S. A., "An Empirical Investigation of the Arbitrage Pricing Theory", Journal of Finance, Vol. 35, No. 5, December 1980.
[12] Chen, N. F., Roll, R. and Ross, S. A., "Economic Forces and the Stock Market", Journal of Business, Vol. 59, July 1986.
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  • APA Style

    Shahid Qadir Dar, Amir Ahmad Dar. (2017). The Working Capital and Its Ratios: A Qualitative Study. International Journal of Statistics and Actuarial Science, 1(1), 24-30. https://doi.org/10.11648/j.ijsas.20170101.15

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    ACS Style

    Shahid Qadir Dar; Amir Ahmad Dar. The Working Capital and Its Ratios: A Qualitative Study. Int. J. Stat. Actuarial Sci. 2017, 1(1), 24-30. doi: 10.11648/j.ijsas.20170101.15

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    AMA Style

    Shahid Qadir Dar, Amir Ahmad Dar. The Working Capital and Its Ratios: A Qualitative Study. Int J Stat Actuarial Sci. 2017;1(1):24-30. doi: 10.11648/j.ijsas.20170101.15

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  • @article{10.11648/j.ijsas.20170101.15,
      author = {Shahid Qadir Dar and Amir Ahmad Dar},
      title = {The Working Capital and Its Ratios: A Qualitative Study},
      journal = {International Journal of Statistics and Actuarial Science},
      volume = {1},
      number = {1},
      pages = {24-30},
      doi = {10.11648/j.ijsas.20170101.15},
      url = {https://doi.org/10.11648/j.ijsas.20170101.15},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.ijsas.20170101.15},
      abstract = {Working capital is necessary tool for a financial economics for a decision making. Unsuitable management of WC i.e. too low or too high of WC may suffer a financial firm, so a proper and sustainable WC is a key to smooth inflow of profit. Mainly WC refers the Current assets of a firm. Currents assets are Inventory, Cash, Receivables, Cash equivalents etc. It is necessary component of a financial firm because WC directly affects the liquidity of a financial firm. In this paper we calculated the different ratios such as Liquidity ratios, Profitability ratios and Leverage ratios. We used the secondary data of XYZ to calculate the above ratios in Excel that are mentioned.},
     year = {2017}
    }
    

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    AB  - Working capital is necessary tool for a financial economics for a decision making. Unsuitable management of WC i.e. too low or too high of WC may suffer a financial firm, so a proper and sustainable WC is a key to smooth inflow of profit. Mainly WC refers the Current assets of a firm. Currents assets are Inventory, Cash, Receivables, Cash equivalents etc. It is necessary component of a financial firm because WC directly affects the liquidity of a financial firm. In this paper we calculated the different ratios such as Liquidity ratios, Profitability ratios and Leverage ratios. We used the secondary data of XYZ to calculate the above ratios in Excel that are mentioned.
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Author Information
  • Swami Vivekanand Institute of Engineering & Technology, Chandigarh, India

  • Department of Mathematics and Actuarial science, BSAU, Tamil Nadu, India

  • Section