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A Study on Financing Pattern of Working Capital in IT Sector Companies in India

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  • Dr. Pradip Kumar Das

Abstract

Working capital in business is akin to that of heart in human body. Efficient working capital management requires well-balanced funds without which either scarcity of funds will cause obstruction in the smooth functioning of an organization or excess funds will prevent an organization from conducting its operation dexterously. Hence, a great deal of attention must be given to the management of current assets investment in an organization. Management can exercise different sources astutely in financing working capital. In this paper, an attempt has been made to unearth the size of short-term financing pattern used to finance current assets along with the contribution of various sources in the context of the selected five IT sector companies. This paper epitomizes an empirical study of the selected companies in India from diverse perspectives through statistical techniques, tables, secondary data collection strategy accessed through Internet and academic databases viz. literature reviews, website, books, journals, annual reports, etc. from 2012-2013 to 2021-2022. The results of the study show that short-term financing does not meet the full financial requirements of current assets and proportion of various short-term sources in financing working capital requirements has also mixed pattern over the years in the selected units under study.

Suggested Citation

  • Dr. Pradip Kumar Das, 2022. "A Study on Financing Pattern of Working Capital in IT Sector Companies in India," Journal of Entrepreneurship and Business Innovation, Macrothink Institute, Journal of Entrepreneurship and Business Innovation, vol. 9(2), pages 1-32, December.
    • Handle: RePEc:mth:jebi88:v:9:y:2022:i:2:p:32
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    References listed on IDEAS

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    1. Myers, Stewart C., 1984. "Capital structure puzzle," Working papers 1548-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    2. Myers, Stewart C, 1984. "The Capital Structure Puzzle," Journal of Finance, American Finance Association, vol. 39(3), pages 575-592, July.
    3. Stewart C. Myers, 1984. "Capital Structure Puzzle," NBER Working Papers 1393, National Bureau of Economic Research, Inc.
    4. Matthew D. Hill & G. Wayne Kelly & Michael J. Highfield, 2010. "Net Operating Working Capital Behavior: A First Look," Financial Management, Financial Management Association International, vol. 39(2), pages 783-805, June.
    5. Baños-Caballero, Sonia & García-Teruel, Pedro J. & Martínez-Solano, Pedro, 2014. "Working capital management, corporate performance, and financial constraints," Journal of Business Research, Elsevier, vol. 67(3), pages 332-338.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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