Title: Impact of Working Capital Management Policies on Corporate Performance—An Empirical Study
Abstract:It is felt that there is the need to study the role of working capital management policies on profitability of a company. Conventionally, it has been seen that if a company desires to take a greater r...It is felt that there is the need to study the role of working capital management policies on profitability of a company. Conventionally, it has been seen that if a company desires to take a greater risk for bigger profits and losses, it reduces the size of its working capital in relation to its sales. If it is interested in improving its liquidity, it increases the level of its working capital. However, this policy is likely to result in a reduction of the sales volume, therefore of profitability. Hence, a company should strike a balance between liquidity and profitability. In this paper an effort has been made to make an empirical study of Indian Consumer Electronics Industry for assessing the impact of working capital policies & practices on profitability during the period 1994–95 to 2004–05. The impact of working capital policies on profitability has been examined by computing coefficient of correlation and regression analysis between profitability ratio and some key working capital policy indicator ratios.Read More
Publication Year: 2007
Publication Date: 2007-12-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 173
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot