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Review of Literature: Chapter-II
Review of Literature: Chapter-II
Review of Literature
Studies on Working Capital Management
Studies on Working Capital Management in India
Studies on Determinants of Inventory Investment
47
In fact, the
problem is not whether to use debt capital but how much debt
capital to use, which would depend on management attitude
towards risk and return. On the basis of this, he developed his
second proposition.
Proposition II The type of capital (debt or equity) used
to finance working capital directly affects the amount of risk
that a firm assumes as well as the opportunities for gain or loss.
Walker again suggested that not only the debt-equity ratio, but
also the maturity period of debt would affect the risk-return
trade-off. The longer the period of debt, the lower be the risk.
For, management would have enough opportunity to acquire
funds from operations to meet the debt obligations. But at the
50
management
by
developing
three
prepositions.
each
alternative
of
debt
maturity,
probability
of
the
variables
probabilistically.
However,
the
distributions
of
liquid-asset
balances,
the
working
capital
management,
also
suggested
that
the
further
suggested
that
working
capital
capital
management
decisions.
They
tried
to
55
This
is
known
as
acceleration
principle.
is
not
realistic
assumption
to
make.
decision
by
providing
funds
for
financing
inventory
in
1966
with
reference
to
working
capital
of
working
undertakings.
62
capital
in
public
sector
Agarwal
(1983)27
also
studied
working
capital
(Projects
and
Development)
India
Ltd.
and
vis--vis
the
norms
suggested
by
Tandon
Committee.
Vijaykumar and Venkatachalam (1995)30 studied the
impact of working capital on profitability in sugar industry in
Tamil Nadu by selecting
a sample of 13 companies; 6
References:
71
1.
2.
3.
4.
5.
6.
7.
8.
9.
72
10.
11.
12.
13.
14.
15.
16.
73
Macro
17.
18.
19.
20.
21.
Hilton, op.cit.
22.
23.
24.
25.
26.
27.
74
28.
29.
30.
31.
32.
33.
34.
35.
36.
75
37.
38.
39.
Chapter-III
76