FIXED ASSETS MANAGEMENT –LG ELECTRONICS

Abstract

Fixed Assets plays very important role in relating company’s objectives the firms to which capital investment vested on Fixed Assets. These fixed assets are not convertible or not liquid able over a period of time the total owner funds and longterm liabilities are invested in fixed assets. Since fixed assets playing dominant role in total business the firms has realized the effective utilization of fixed assets. So ration contribution very much in analyzing and utilized properly it effects long term sustainability of the firms which may affect liquidity and solvency and profitability positions of the company. The first important consideration to be acquire only that much amount of fixed assets which will be just sufficient to ensure and efficient running of the business. In some cases it may be economical to buy certain assets in a lot size. Another important consideration to be kept in mind is possible increase in demand of the firm’s product necessarily expansion of its activities. Hence a firm should have that much amount of fixed assets, which could adjust to increase demand. The third of fixed assets management is that a firm must ensure buffer stocks of certain essential equipment / services to ensure uninterrupted production in these events of emergencies. Sometime, there may be a breakdown in some equipment or services affecting the entire production. It is always better to have some alternative arrangements to deal with such situations. But at the same time the cost of carrying such buffer stock should also be evaluated. Efforts should also be made to minimize the level of buffer stock of fixed assets be encouraging their maximum utilization during learn period, transferring a part of peak period and living additional capacity