Management of working capital in fertiliser industry: a comparative study

Abstract

Significance of fertilizer industry to the agriculture dominated economy of the nation in no manner can be underestimated or uncared for. With the gigantic growth in the domestic manufacturing competence, India has come out as the third biggest producer of Nitrogenous and Phosphotic Fertilizers in the world, next only to China and USA. Fertilizer industry done marvellous hard works to make the country self- dependent in fertilizer manufacturing and has succeeded to a great extent in bringing down the import of fertilizers. Working capital is both life-blood and spirit of a company, just as flow of blood is indispensable to the human body for maintaining life, working capital is equally vital to maintain the smooth functioning of a business, without which no organization can bring a sound solvency to the business. It enables a company in creating and maintaining benevolence. It also enables a business undertaking to pay off its current dues and also provides much needed supply of raw materials. Adequate working capital provides vigor to the company and capability to countenance disaster. Working capital is tremendously crucial for meeting the daily necessities of a company. No business can flourish without working capital. newlineThe study of management of working capital in Fertilizer Industry of India essentially has been undertaken to evaluate the management of working capital in fertilizer industry of India. 24 companies (big players of the Fertilizer Industry of India) which consists of 7 in the public sector, 15 in the private sector and 2 in the cooperative sector were included in the universe. The universe was stratified into three strata for the purpose of selecting the sample i.e. cooperative, public and private sector. Sample for the present study has been chosen from the population formulated for the purpose of study of management of working capital. Out of 24 companies in the universe, a sample of 10 companies was selected.