Working capital management at Attard Tipped Tools Limited : a case study

Abstract

Liquidity is an essential factor in ensuring a firm's long-term survival and success. Of equal importance, therefore, is a firm's operating cycle, which traces the progression of cash through current assets, and back into cash. This circulation of working capital, the liquid resources of the firm, requires appropriate administration and control by the firm's management to ensure the firm's success. This dissertation focuses on the management of Working Capital at Attard Tipped Tools Limited, with special reference to stocks, debtors and creditors. Attard Tipped Tools Limited was established in 1972 and grew to become one of the leading suppliers and wholesalers to the Maltese Furniture and Construction industries. The local business scenario is currently experiencing serious setbacks due to liquidity problems, which are spilling over into most industries, including the manufacturing and construction industries, which the company services. In this regard, Attard Tipped Tools Limited is considering various possibilities to deal with this situation. This dissertation focuses on improvements which can be implemented in order to address shortcomings present within the firm's existing system for managing stocks, accounts receivable and payable, and cash, with a view towards shortening the company's operating cycle.