Working capital management at a local car rental firm : a case study

Abstract

It is critical for the success of any business to adopt an efficient and effective working capital management strategy in order to avoid difficulties in liquidity. Successful working capital management is crucial in all firms irrespective of their size. Without cash, no matter how profitable, a company cannot survive. The aim of this dissertation is to evaluate the tools and techniques used by management, whether directly or indirectly, in working capital management in order to determine the current liquidity position of The Company being studied and to analyse the current position and make recommendations for improvement. The study takes place at a local company that was set up nearly three decades ago: a time when new business was thriving with little regard to control procedures and specialised management techniques. The Company is a service provider operating in a highly competitive market as part of the Maltese tourism industry. References from literature and other sources were applied in order to gauge the strengths and weaknesses of working capital management techniques within the Company and to make suggestions in order to ensure that each component of working capital is maximised to its greatest potential in view of attaining success and viability.