Effect Of Working Capital Management On The Profitability Of Selected Manufacturing Companies In India

Abstract

Throughout the long period there has been a major discussion or conversation on the impact of working capital on the profitability of the companies. Working Capital is one of the major important part in each companies or businesses and also in decision of financial system or management. The major role for any companies and its department of corporate divisions is its WCM. The basic concept of WCM is net working capital balance  alongside the overheads of different divisions of profitability. It is essential for the day to day costs of the companies. Examining the relationship between working capital management's effect on Indian co’s profitability is the primary goal of this article. The sample size of this research are selected 20 manufacturing companies of India  from different sectors such as, IT, FMCG, Cement and steel  sectors and selected five companies from each sectors based on market size for a period of five years from 2018-19 to 2022-23 and analysis is evaluated based on different factors. or financial ratios which are given under GP, net profit, inventory turnover ratio, capital employed returns and working capital ratio. Information was gathered from the official yearly reports and analysis were applied with determined that Pearson's coefficient of correlation knows the outcomes and performance b/n different variables used and applying the SPSS statistical software tool, with a 5% significance level. However, this study discovered and demonstrated a favorable connection of the influence of working capital and other parameters, as well as the considerable interaction between the variables.