Firms need to improve working capital needs, says EY study

A strategic approach needs to be taken towards process improvements to help in time reduction, better customer engagement

Indian companies do not fare well when it comes to managing their working capital. They had Rs 1.8 trillion of cash trapped in their balance sheets at the end of 2016-17, according to an EY study released on Thursday.

Indian companies could improve their working capital position by adopting better practices, the study said.

The report is an analysis of the findings from the working capital performances of the top 500 companies by sales in 2016-17. The rising need for cash has seen a significant increase in short-term borrowings. However, the ability of firms to service debt (interest coverage) has been declining