RECEIVABLES-PAYABLES MANAGEMENT AND LIQUIDITY TRAP- A CASE STUDY OF SELECTED COMPANIES OF INDIAN CEMENT INDUSTRY
Keywords:
Receivables, Payables, Liquidity, Credit, Cost of creditAbstract
Receivables constitute a substantial portion of current assets and are mainly guided by credit policy decisions taken by the business enterprise. Extending credit would be a fruitful solution only if extra revenue generated from extending credit period exceeds the cost of credit. Accounts payable is basically a short term financial obligation for a business enterprise. The efficiency of the accounts payable management has a bearing on a company’s cash flow, credit rating and operational costs. Proper Receivables and Payables Management is key to maintain a balance between liquidity and profitability. The Author in this paper has thrown light on actual scenes as is existed regarding Receivables and Payables in Indian Cement Industry, highlighted the importance of proper Receivables and Payables Management, discussed as to how the companies may improve their Receivables and Payables Management and may avoid the situation of liquidity trap.
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