Working Capital Management Practices of Reliance Industries Limited

Abstract

Working capital is the section of a firm’s capital that is required to capitalise liquid assets such as money, marketable securities, borrower and expenditure that are benefit and required immediately. Thusly invested funds in current assets are quickly transformed back into cash and then flow out again in exchange for other current assets. As a result, it is often referred to as circulating, revolving, or short-term capital. The research primarily focuses on examining and comprehending Reliance Industries' working capital components. Reliance employs sources including commercial papers, commercial banks, advances from clients, and statutory dues to finance the working capital of the company. The amount of working capital needed determines a company's liquidity and profitability, which has an impact on financing and investment decisions. A lower need for working capital means a lower cost of capital, which in turn means more money is available for shareholders. Yet, having less working capital could result in lost sales, which would reduce profitability. Identification, examination, and interpretation of the working capital during the previous five years are done about business performance. So, it is the general responsibility of management to ensure that the firm's resources are utilised effectively and efficiently and that its financial situation is stable. The monetary and operation function suggested it has to foresee the company's future.