Creditworthiness Measures the Efficiency of Cash Management - A Study on IT Sector

Abstract

We live in a competitive age of environment. Sound credit management approach can ensure success in this environment. Credit analysis is nothing but risk analysis. Todays competitive environment and changing scenario, every business organization tries to overcome such situation. To cope with malfunctioning in competition, market share and economies in business, many small businesses walk in the path of mergers and acquisitions, and giant organisations take advantage. Now the companies are diversified into variety of products and services. So, to make the organisation profitable, some objective information is required. Now a days as business firm grows or is taken over by large organisation, therefore, the decision making process becomes more complex and centralized and the old traditional methods of credit analysis become misleading. So in this paper we tried to give importance to the effect of creditworthiness on cash management.

Keywords: Liquidity, Cash Management, Creditworthiness, Credit Score, Risk Description Model and Efficiency of Cash Management

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