Working capital management sits at the heart of a manufacturing firm's short-term financial health, since it governs whether day-to-day funds are available for production, distribution, and credit administration. This article looks at how Sri Ramana Enterprises, a Chennai-based manufacturer and distributor of polycarbonate roofing sheets and allied building products, has handled its working capital over the five years from 2020-21 to 2024-25. Using a descriptive and analytical design built on secondary data from the company's financial statements, the study applies ratio analysis, trend analysis, and simple correlation analysis to assess liquidity, the efficiency of inventory, receivables and payables management, and the behaviour of the cash conversion cycle.

 

The findings show a company on a steady upward path: net working capital climbed from 135 lakhs to 240 lakhs, the current ratio edged up from 1.60 to 1.68, the inventory holding period fell from 106 to 97 days, the receivables collection period shortened from 60 to 56 days, and the cash conversion cycle shortened from 91.4 days to 81.7 days even as the quick ratio and absolute cash ratio stayed below textbook benchmarks throughout. The correlation analysis provides directional evidence of the observed improvement in liquidity and efficiency and indicates a strong positive association between net working capital and sales growth.. Overall, the article concludes that Sri Ramana Enterprises has managed its working capital position reasonably well during the study period and it closes with practical suggestions on inventory optimisation, receivables monitoring, and regular ratio review.

 

Keywords: Working Capital Management, Liquidity, Manufacturing SME, Ratio Analysis, Cash Conversion Cycle, Sri Ramana Enterprises