Assessing the Efficiency of Working Capital Management in TSRTC - Opportunities & Challenges

Abstract

Purpose: This study is intended to evaluate the effectiveness of TSRTC’s working capital management (WCM) systems with particular focus on WCM issues faced. The study inquiry took an explorative research design for investigating the objectives concentrating on understanding the financial affairs within the company.

Methodology: The exploratory design was used to explore how TSRTC manages its working capital. Primary data collection used the Convenient Sampling Method in collecting data through the Finance Department employees. The study focused on internal capabilities such as understanding of the finances, best practices in the industry and efficient cash flows, as opposed to external constraints on responsiveness to the economic and market situation.

Findings: The analysis brought to light TSRTC’s internal operational strengths in understanding finances, industry practice and cash management skills as key conducive factors in operations. Understandably however, problems of a more fundamental nature are still present, namely problems stemming from the external environment and in this case the working capital management (WCM) is fundamental in being able to provide transport services and satisfy customers. The main challenges reported included inability to efficient in the control of stock as well as the over reliance on poor management of working capital leading to delay in provision of transport services.

Implications: For a lasting operational effectiveness for the TSRTC, it becomes critical to respond to the outlined challenges. There is a necessity to adopt strategies ensuring supplier negotiations, policy implementation, working capital flow forecasting, integration of continuous monitoring, and the use of technology to strengthen operational effectiveness and financial positioning. The assertiveness of the management to hold regular reviews, change when required and be proactive is key in managing strategic planning of the organization in ever changing business environments. Improving analytical capacities, performing regular analyses of the market and engaging with industry practitioners are essential progress towards changes in the working capital practices to the external factors. Increasing responsiveness to external changes will be vital for TSRTC in terms of maintaining and developing into the future the working capital management policies in the changing economic environment