Working Capital Management of United Power Generation Limited

Abstract

The purpose of this study is to give a comprehensive examination of the working capital management at United Power Generation from the years 2019 to 2023. Both the current ratio and the quick ratio provided evidence that the company's liquidity saw considerable shifts over the course of a period of five years. After reaching their highest point in the year 2020, both ratios saw a drop because of temporary liquidity issues. An upward trend in the inventory turnover ratio is indicative of greater inventory management and more sales from inventory, both of which are favorable indicators of the efficiency of the operations. The swings that occurred in the accounts receivable turnover ratio were evidence that the organization was able to collect receivables in an effective manner. Additionally, the accounts payable turnover ratio shifted in response to the organization's payment procedures and the connections it maintained with its suppliers. The ups and downs seen in United Power Generation's cash conversion cycle indicate that the firm may benefit from examining its day-to-day activities to improve its financial management. While the rising current liability ratio indicated higher short-term debts, negative working capital to debt ratios expressed worries about satisfying short-term obligations. A more effective financial management of daily operations is indicated by variations in the cash conversion cycle. In summary, the analysis highlights the importance of efficient working capital management for maintaining United Power Generation's financial stability. The analysis focuses on identifying strengths and areas for improvement in managing short-term liquidity and operational efficiency.