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Are Poor Accounting Receivable Management Practices Are Responsible for Dairy Plant Failure?: A Case Analysis of Muktai Dairy Pvt. Ltd.

Abstract


This paper aim at understanding the failure of the private milk dairy plants on the basis of case analysis with the help of financial tools like ratio, percentage cost of sale and common size statement analysis. The researcher critically analyzed the causes of failure on the on the basis of annual financial statement analysis and the subsequent structured interview of the director’s. The researcher finds that poor selection of customers, liberal credit policy, delayed payment and debt ridden capital structure besides lack of financial acumen and professionalism in handing dairy operations are the major reasons of dairy plant failure. The researcher concluded that financial knowledge and skills is essential for implementing the sound financial management practices especially with reference to accounting receivable management so that short term survival, profitability and growth of dairy plant


Keywords

Account receivable management practices, financial knowledge and skills, milk processing, financial viability

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