Abstract

Working capital is the funds available for day to day operations of an organization. It represents the excess of current assets over current liability. It indicates the liquidity level of the companies for managing the daily expenses like trade payables, cash, inventory cost and short term debt. Working capital plays an important role in the food manufacturing sector. This sector needs to meet its expenses faster as it has to deliver the products on its due date without failing or else it will lose customers. It has been found that food industries with shortest working capital cycle has relatively higher rate of profitability. The food sector has undergone lot of change, growth, operation, and risk handling. One of the key factors is working capital management. In the food sector the two important indicators of financial strengths are profitability and cash flow efficiency.