A Comparitive Study on Working Capital Management of Selected Pharmaceutical Companies in India

Abstract

Working capital management refers to management of current assets and of current liabilities. Every company may have an optimal level of working capital that maximizes their value. Prior evidence has determined the relationship between working capital and performance. The working capital management was determined by the cash conversion period and position of working capital, indicated by profitability and liquidity analysis. As the data selected for the study consists of observations in a time series manner so, analytical method is used in this study. Ten companies were selection during the study period is confined only 10 years from 2003-2004 to 2012-2013. The financial and statistical tools used for the study were Ratio Analysis, Descriptive Statistics and Indices. Results indicate that high investment in inventories and receivable lead to lower profitability and current assets to total assets lead to higher profitability. The results conclude that a strong relationship between working capital management and financial position of selected pharmaceutical companies in India.