How working capital is used for managin and financial performance?

How the organisation’s
working capital over a twenty
years
’ period and its impact on
financial performance

Contents
ACKNOWLEDGEMENT...............................................................................................................1
EXECUTIVE SUMMARY.............................................................................................................3
CHAPTER 1: INTRODUCTION....................................................................................................4
Background of the Study:.......................................................................................................4
Research aim and objectives:.................................................................................................4
Research Question:.................................................................................................................4
Rational of the study...............................................................................................................4
Significance of study:.............................................................................................................5
Dissertation structure..............................................................................................................5
CHAPTER 2: LITERATURE REVEIW.........................................................................................6
Introduction............................................................................................................................6
Theme 1: Working capital is being controlled in banking sector...........................................6
Theme 2: Working capital used for managing functional activities:.....................................7
Theme 3: Use of available resources for managing working capital in the banking sector...7
Impacts on financial performance in banking sector..............................................................8
CHAPTER 3: RESEARCH METHODOLOGIES........................................................................10
Overview:.............................................................................................................................10
Sources of data types ...........................................................................................................10
Research approach and philosophy:.....................................................................................11
Data collection......................................................................................................................11
Data Analysis........................................................................................................................14
Reliability and validity.........................................................................................................14
Limitations of research approach:........................................................................................15
Ethical issues........................................................................................................................15
Regression analysis..............................................................................................................16
Research hypothesis:............................................................................................................16
CHAPTER 4: DATA ANALYSIS................................................................................................18
Chapter 5: Recommendations and Conclusion..............................................................................34
REFERENCES..............................................................................................................................35

ACKNOWLEDGEMENT
I am graceful to my teacher, friends and companions who provided me suggestion and
assistance in for completing this project. For fulfilling my dissertation on “ working capital over
the twenty years' period and its impact on the financial performance”. I am thankful to my tutor
who renders me the guidance for making dissertation in an effective manner. In the end, I am
thankful to all who have directly or indirectly assisted me for fulfilling of my dissertation.
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ABSTRACT
The main aim behind of research to carry out such dissertation in order to investigate
components which simply affect on the profitability of the European Banks. In this, for facing
research questions secondary data sources have implemented by the researcher. On the basis of
these report, by assessing books, journals and scholarly articles related to the factors which
impact on bank's profitability secondary data which have collected. In addition to this, annual
reports of various European banks likewise been assessed in order to collect the data and achieve
thee research objectives. Apart from that, statistical tools like descriptive assessment, correlation
and regression are performed by the researcher in order to drive a desirable solution.
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EXECUTIVE SUMMARY
Working capital is the cash amount which is associated to the organisation's routine
operations. There are mainly three essential components which are required to be focused in
order to free up cash otherwise tied up to attain higher cash benefits opportunities, apart from
that, determining in order to assess and managing inefficiencies in processes and manufactures.
More particularly economic turmoil, organisations rely on their cash reserves by way of security.
This is henceforth crucial for the organisation in order to have a strong working capital
management in order to free up the cash from their working capital and enhance their cash
reserves. This would assist them to remain resilient towards unavoidable circumstances like
exchange rate fluctuations, rising interest rates and reducing in sales. If the working capital
position is strong then in that case, Bank could perform better and generate more sales by using
available resources in a most effective manner.
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CHAPTER 1: INTRODUCTION
Background of the Study:
This is the research on the firm’s working capital over a twenty-year period and its
impact on the financial performance. Under this research, banking corporation’s working capital
is analysed in an effective manner. By analysing the working capital, various stakeholders can
assess the performance of the organisation in an effective manner (Marr, 2012). This report is
made on the working capital on the banking sector in UK and how it controlled in an effective
manner and it's effect on its performance of the banking sector. Researcher needs to make certain
tools that can be used by the firm for making business decisions in order to frame strategy.
Research aim and objectives:
Aim: “To evaluate the working capital management over the last 20 years and its impact on the
financial performance of banks”.
Objectives:
a) To assess whether capital management has any influence on the solvency of banks.
b) To address the causes of bank suffering or reasons why there are distress in banking
nowadays.
c) To address whether working capital management has any influence on the profitability of
the bank.
d) To how bank manager handle management of the bank.
e) To find out how appropriate is the working capital of the bank.
Research Question:
a). How is working capital being controlled in Banking sector?
b). Is there enough working capital for functional activities in the bank?
c). Do management of bank make an adequate use of available working capital.
Rational of the study
The main aim behind convening current investigating is to elaborating the components
which have influence on the working capital over the last 20 years and its impact on the financial
performance in an effective manner. This is adopted as key issues as after the period of financial
crisis, diverse efforts were formed by the banking companies for enhancement of the monetary
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aspects. Henceforth, via quantitative investigation, such research reflects micro/ macro factors
which affects the working capital of the banking companies.
Significance of study:
There are various advantages of working capital management of banking sector. Some of
them are mentioned hereunder:
1. Research project would reflect an opportunity for understanding and improving flexible
and competitive tools of working capital management.
2. This helps as data base of information on the contemporary practices in assessment.
3. The research would enhance to know about region of areas risk reduction, solvency
management.
4. This would assist the banking sector management and form a strong use of its working
capital decision making procedures.
Dissertation structure
The current research and its result are beneficial for the performance of Banking sector
which helps in providing deep investigation to them about the issues which impact on the profit
margin. In the introductory section, background, aim and objectives which have been covered by
the scholar. As per second chapter, brief thesis is made on the scholar via forming evaluation of
books and journals. In the third chapter, researcher determines the research strategies which are
adequate for the concerned issues which is being assessed. Chapter 4 of dissertation reflects
findings and assist the same with the secondary data set. In chapter 5, researcher conclude
findings and renders assistance for advance improvements.
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