Working Capital Management and Operating Profit of Indian Automobile Companies

International Journal of Economics and Management Studies

© 2020 by SSRG - IJEMS Journal

Volume 7 Issue 8

Year of Publication : 2020

Authors : Dr. Ankita Rajdev

10.14445/23939125/IJEMS-V7I8P112

How to Cite?

Dr. Ankita Rajdev, "Working Capital Management and Operating Profit of Indian Automobile Companies," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 8, pp. 80-89, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I8P112

Abstract:

Working Capital management is a hot topic gaining a lot of momentum in today's environment. Working capital management is an inevitable part of
finance which, if ignored, can significantly affect the profits of the companyand, in some cases, its future existence. In order to explain the relationship between working capital management and profitability, various researches have been conducted to analyze the impact of working capital on profits of the firm all across the globe. Profitability in a business context explains the ability of any business, institutions, enterprises, and corporations to earn profits. Profitability isused to determine the operating efficiency of any given business. It is important for any firm to be profitable in order to fuel its growth ambitions and, more importantly, to survive in the future. Profitability is the overall measure and indicator of the success of any enterprise.
The basic purpose of the research is to assist and develop the relationship between different variables of working capital & net operating profit and its effect on profitability ratios.The paper intends to present this in a more lucid, simple, unambiguous, and precise manner so that reader is able to evaluate its implication for the company.
The financial accounting approach to ratio analysis is used to determine the performance of the firm’sprofitability management. In addition, statistical
methods have been adopted, such as central tendency measurements, dispersion measurements, and Pearson correlation.

Keywords:

Working capital management, Profitability management, profits, ratio analysis, and Indian automobile sector

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