Inventory Turnover in Engineering Micro and Small Enterprises

Abstract

Inventory management is one of the important constituents of working capital Management. Inventory includes raw materials, work in progress and finished goods. Conversion of cash to inventory and inventory to receivables are two important phases of operating cycle. Inventory turnover and inventory conversion period are important tools in understanding efficiency in inventory management. Effective Inventory management is essential not only in large scale Enterprises but also in Micro and Small Enterprises. This research paper focuses on Inventory turnover in selected Engineering Micro and Small Enterprises (MSEs) of Andhra Pradesh, which is a seventh state in India, in terms of area. The data collected is analyzed with financial techniques including ITR and ICP and statistical tools covering average, variance and two-way ANOVA.