A Study on Working Capital Management and Its Impact on Liquidity at Indo Rama Synthetics

Abstract

Effective working capital management is vital for ensuring the smooth functioning and financial stability of organizations. The study explores the intricate relationship between working capital management and its impact on liquidity at Indo Rama Synthetics. By analysing key components such as inventory turnover, receivables management, and cash conversion cycles, the research evaluates how efficient practices contribute to maintaining an optimal liquidity position. It highlights the significance of balancing short-term assets and liabilities to mitigate financial risks while enhancing operational efficiency. The findings suggest that prudent working capital strategies directly influence liquidity, fostering resilience against market fluctuations and operational disruptions. Moreover, the study delves into sector-specific challenges faced by Indo Rama Synthetics, offering actionable insights for tailoring working capital policies to align with industry demands. This research underscores the necessity for organizations to adopt a strategic approach in managing working capital to achieve financial robustness and support sustainable growth.