Keywords: Receivable Management, Profitability, Automobile, Working Capital.
* Research Scholar, Department of Commerce and Financial Studies, Bharathidasan University, Tiruchirappalli, Tamil Nadu, India **Research Scholar, Department of Commerce and Financial Studies, Bharathidasan University, Tiruchirappalli, Tamil Nadu, India *** Associate Professor and Head of the Department of Commerce and Financial Studies, Bharathidasan University, Tiruchirappalli, Tamil Nadu, India
Electronic copy available at: http://ssrn.com/abstract=1791942
1.0 Introduction Automakers zoom on the fastest lane in January 2010. January 2010 marks a milestone in the automotive journey of the country with Maruthi Suzuki, Tata Motors, Mahindra & Mahindra and General Motors India reporting their highest ever monthly sales. Maruthi, the top car maker, set a new sales record of nearly 96,000 units, while its closest challenger, Hyundai Motor India, clocked 52,635 units and, in the process, its highest ever domestic sales at 29, 601 units. For Tata Motors, passenger vehicle sales of 26,245 units was its highest ever to date. Similarly, Mahindra & Mahindra and GM India saw their sales reaching all-time highs of 20,332 and 9,421 units respectively. The January month also saw the company treble its exports to 14,562 units and register a 40 percent growth in the multi purpose vehicle segment, which almost touched 11,000, with the new Eeco 1. It is worth noting that creating value with cash flow, high profitability and better consumer service are fundamental challenges to all types of business. In this regard, the aim of any company is to increase the profit by increasing sales and reducing cost. A trader very often buys and sells goods on a credit basis. The credit is one of the instruments to promote sales in the competitive world. In the event of credit sales, the sundry debtors are one of the significant and major components in the Receivables Management. The objectives of Receivable Management are to increase the volume of sales, to ensure credit worthiness or financial soundness of the concern and to measure the effective handling of accounts Receivables. In a business concern, the accounts receivable is considered to be the most important aspect of financial planning and control next only to inventories and cash. The term ‘Accounts Receivable’ is defined as ‘debt owned to the firm by customers arising from sale of goods or services”. The word ‘Account Receivables ’ is also known as ‘Sundry Debtors’ or ‘Trade Debtors’ or ‘Book Debts’. The Sundry Debtors may be defined as “money due from a customer for sale of goods or services in the ordinary course of business”.