Working capital management at a local electrical import company

Abstract

The success of a business does not lie solely in the quantum of sales or profits achieved. Consideration should be given to the working capital, which can be broken down into the elements of current assets and current liabilities. The art of working capital management lies in reducing the length of the operations cycle. Unless a business has sufficient liquidity, its operations are likely to suffer. This dissertation was conducted with the aim of evaluating, analyzing and recommending on the management and control of working capital at a local company within a group, founded slightly more than twenty years ago. The Company's primary operations comprise importing and distributing electrical switchgear and accessories across the Maltese islands. The knowledge acquired through literature and other sources was applied in identifying the strengths and weaknesses in the Company's current practices, policies and strategies, and thereafter making suggestions on what should be improved to ultimately use each resource employed in the business to the greatest effect.