scholarly journals WORKING CAPITAL MANAGEMENT - IT’S IMPACT ON LIQUIDITY AND PROFITABILITY - A STUDY OF KERALA MINERALS AND METALS LTD

2020 ◽  
Vol 8 (5) ◽  
pp. 199-207
Author(s):  
Sunilraj N.V
Keyword(s):  
Negative Relationship ◽  
Ranking Method ◽  
The Other ◽  
Capital Management ◽  
Working Capital ◽  
Weak Correlation ◽  
Short Term ◽  
Current Ratio ◽  
Working Capital Management ◽  
Proper Management

Working capital management involves the various steps for the proper management of current assets and current liabilities which avoids the risk of a shortage of funds for meeting short-term obligations and eliminates the blocking of funds in current assets on the other hand. The present study makes an attempt to give a conceptual insight on working capital management and assess its impact on liquidity and profitability of Kerala Minerals and Metals Ltd. A proper tradeoff between profitability and liquidity is necessary for every enterprise to survive in any kind of environment. The study also made an attempt to analyse the liquidity and profitability position of KMML. For this, correlation and spearman’s rank has been used. The study covers ten-year data from 2009-10 to 2018-19. The correlation and spearman’s ranking method exhibits a weak correlation and negative relationship between liquidity and profitability. The Motaal’s test has also been applied to test the liquidity position. The liquidity ratios such as the current ratio and liquid ratios are higher than the benchmark which means that the liquidity position is good. The study indicates that the liquidity position of the enterprise has enhanced over the period of study.

scholarly journals WORKING CAPITAL MANAGEMENT - IT’S IMPACT ON LIQUIDITY AND PROFITABILITY - A STUDY OF COAL INDIA LTD

2016 ◽  
Vol 4 (12) ◽  
pp. 178-187
Author(s):  
Shiva Kumar ◽  
N Babitha Thimmaiah
Keyword(s):  
Negative Relationship ◽  
Ranking Method ◽  
Statistical Techniques ◽  
Capital Management ◽  
Working Capital ◽  
Weak Correlation ◽  
Working Capital Management

The present paper makes an attempt to give a conceptual insight on working capital management and assess its impact on liquidity and profitability of Coal India Ltd. The liquidity and profitability tradeoff has become an important aspect for all the organizations. The attempt also has been made to test the liquidity and profitability position. For this correlation and spearman’s rank method has been applied. The correlation and spearman’s ranking method indicates weak correlation and negative relationship between liquidity and profitability. The Motaal’s test has also been applied to test the liquidity performance. It indicates liquidity position of the firm has improved over the study period. The study covers five year data from 2010-11 to 2014-15. For the analysis ratios indicating working capital performance and some statistical techniques are employed.

Working Capital Management

2014 ◽  
pp. 152-161
Author(s):  
Ashoke Mondal ◽  
Uttam Kumar Dutta
Keyword(s):  
Negative Relationship ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Holding Period ◽  
Proper Management ◽  
Significant Negative Relationship ◽  
The Impact

It is expected that proper management of working capital contributes positively to the value of the firm, and liquidity of the firm negatively affects the profitability of the company. The purpose of the chapter is to analyze the composition and changes of the working capital and to find the impact of liquidity and efficiency of working capital management on profitability. For this purpose, this study is conducted on Cipla Ltd. for the period 2001-2009. From the study, it is found that there is a significant negative relationship between liquidity and profitability. It also reveals that managers can create value for the firm by reducing the holding period in inventories and receivable.

scholarly journals Working Capital Management and Its Impact on the Profitability of Pukar International Co.Ltd.

NCC Journal ◽  
2019 ◽  
Vol 4 (1) ◽  
pp. 141-147
Author(s):  
Puspa Raj Ojha
Keyword(s):  
Descriptive Analysis ◽  
Negative Relationship ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Current Ratio ◽  
Working Capital Management ◽  
International Trading ◽  
Collection Period ◽  
The Relationship

This paper aims to report the results of an investigation of the relative importance of working capital management, measured by the Return on Assets (ROA), and its components (Current ratio, average collection period and average payment period) to the profitability of Pukar International Trading. This paper analyzes the effect of working capital Management on firm’s profitability in Nepal for the period 2071 to 2072. For this Purpose, financial data of four year is used. Pearson’s correlation and Descriptive analysis were used to establish the relationship between working capital management and firm’s profitability and components of working capital like Average collection period, Average payment period and Current ratio. The study finds a negative relationship between profitability and average collection period and average payment period, but appositive relationship between profitability and current ratio. Moreover, current ratio and firm size also have significant effects on the firm’s profitability. Based on the key findings from this study it had been concluded that the management of a firm could create value for their shareholders by reducing the number of day’s accounts collection. Firms could also take long to pay their creditors in as far as they did not worry their relationships with these creditors.

Do working capital management practices influence investment and financing patterns of firms?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ahsan Akbar ◽  
Xinfeng Jiang ◽  
Minhas Akbar
Keyword(s):  
Capital Structure ◽  
Negative Relationship ◽  
Capital Management ◽  
Working Capital ◽  
Short Term ◽  
Working Capital Management ◽  
Content Type ◽  
Investment And Financing ◽  
The Impact

PurposeThe present study aims to investigate the impact of working capital management (WCM) practices on the investment and financing patterns of listed nonfinancial companies in Pakistan for a span of 10 years.Design/methodology/approachThe study is based on secondary financial data of 354 listed nonfinancial Pakistani firms during the period of 2005–2014. The two-step generalized method of moment (GMM) regression estimation technique is employed to ensure the robustness of results.FindingsEmpirical testing reveals that: excessive funds tied up in working capital have a negative impact on the investment portfolio of sample firms. Besides, a negative relationship between change in fixed assets and excess net working capital posits that, eventually, firms use idle resources tied up in short-lived assets to boost their investment activities. Furthermore, larger working capital levels were associated with higher leverage ratio which indicates that firms with inefficient WCM policies have to rely heavily on long-term debt to meet their short-term financing requirements. Additional results indicate that firms that take more time to sell inventory and convert receivables to cash, make more use of debt. Results of cash management models illustrate that cash-rich firms have lower leverage levels which signal the strong financial health and internal revenue generation capability of such firms.Originality/valueThere is a dearth of empirical studies that examine the implications of WCM decisions on a firm's capital structure. Besides, these studies are only confined to how a WCM policy influences the long-term investment activities of a firm. The research contributes to the extant literature by empirically revealing a link between the WCM practices and the firm's long-range investment and financing patterns. Hence, financial managers shall account for the impact of their short-term financial management decisions on the capital structure of the firm.

scholarly journals Does working capital management affect the profitability of commercial banks: the case of Kosovo

2020 ◽  
Vol 9 (1) ◽  
pp. 126
Author(s):  
Ibish Mazreku ◽  
Fisnik Morina ◽  
Florentina Zeqaj
Keyword(s):  
Commercial Banks ◽  
The Other ◽  
Debt Ratio ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Current Ratio ◽  
Bank Profitability ◽  
Working Capital Management ◽  
The Impact

Purpose: This paper aims to analyze working capital and its impact on the profitability of commercial banks. The other objectives of this study are to analyze the factors that influence the profitability of commercial banks, to find out the relationship between profitability and working capital management. To achieve these research objectives, several research questions have been posited: How much does working capital affect the profitability of commercial banks? What are the relationships between bank profitability and bank size, debt ratio and current ratio? What are the other factors affecting the profitability of commercial banks? Methodology: The empirical data to be used in this research are secondary data and will be based on annual reports of commercial banks and reports of the Central Bank of Kosovo. From these data, some indicators such as return on assets, current ratio, debt ratio and banks’ size will be calculated. This research covers a period of 5 years and the data will be analyzed and interpreted through econometric models. In addition, to analyze the impact of working capital on the profitability of commercial banks in Kosovo, trend analysis will also be applied through the comparative method. Findings: Based on the empirical results, we can conclude that bank size and the current ratio have positively affected the performance of commercial banks in Kosovo, whereas the debt ratio has had a negative effect. All the independent variables in relation to the dependent variable (ROA) are at the standard level of significance P-value = 0.05. Practical implications: Through this study we can recommend all commercial banks in Kosovo to invest much more in working capital, since financial investments in working capital affect the bank's profitability. This means that a high investment in the elements of working capital can lead to increased bank profitability, whereas its profitability decreases when investment in working capital is low. Originality: This paper presents real and sustainable results with respect to the conclusions. The period analyzed (2013-2017) is a persuasive period for drawing competent conclusions and recommendations.  Keywords: working capital, debt ratio, current ratio, bank size, return on assets JEL Classification: G2, G20, G21, G3, G32, D24

scholarly journals Mediating Role of Working Capital Management in the Relationship of Corporate Governance Measures and Firm Performance: Panel Study from Pakistan

2021 ◽  
Vol 7 (2) ◽  
pp. 273-286
Author(s):  
Areeba Khan ◽  
Rana Muhammad Shahid Yaqub ◽  
Awais Javeed
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Mediating Effect ◽  
The Other ◽  
Capital Management ◽  
Working Capital ◽  
Current Ratio ◽  
Working Capital Management ◽  
Relationship Of ◽  
The Relationship

Purpose: Corporate governance and management of working capital are seen as two main fields of corporate finance. The purpose of the research study is to examine the interrelationships between corporate governance, working capital management and performance of the firm.Design/Methodology/Approach: Sample consists of 140 non-financial firms listed on the Pakistan Stock Exchange from 2008 to 2015. Data has been analyzed by using structural equation model. Mediating effects of managing working capital have been tested by using the approach suggested by Preacher and Hayes (2008).Findings: The findings revealed that current ratio partially mediates the effect of size of the board and CEO role duality whereas fully mediates the Impact of a concentration of ownership on firm results. The other variable of working capital management i.e. cash conversion cycle has not shown any mediating effect in Corporate governance and the relationship between firm results. For the other relationship the study found that board size affects firm performance positively whereas CEO duality and audit committee independence have negative impact on profitability of firms. For the relationship of working capital management on firm Performance, the study identified substantial negative and positive impacts on firm performance of the cash conversion period and current ratio, respectively.Implications/Originality/Value: The current study was based on least considered variables and the pioneer in testing the complex relationship through SEM-AMOS.

scholarly journals An Analytical Study of Working Capital Management of Selected Cement Companies in India

2021 ◽  
Vol 2 (4) ◽  
pp. 56-65
Author(s):  
Ahmed Mahdi Abdulkareem ◽  
Alok Kumar Chakrawal
Keyword(s):  
Data Analysis ◽  
Analytical Study ◽  
Balance Sheet ◽  
Capital Management ◽  
Working Capital ◽  
Short Term ◽  
Current Ratio ◽  
Working Capital Management ◽  
Test Hypothesis ◽  
Near Term

This article is to analyze and evaluate working capital management of selected cement companies.  The main purpose of this study is to find out the liquidity position of selected cement companies in India, five companies were selection .The duration of study is five years start from 2015-16 to 2019-20. Two ratios were used for the analysis of data: current ratio quick ratio. To test hypothesis ANOVA was used. The major findings of the study indicate that there are significance difference in the quick ratio and current ratio of selected cement companies. Based on the data analysis, there is a mixed trend in the current ratio during the year 2015-16 to 2019-20. The analysis also shows the ups and down in the quick ratio of the selected cements companies during the period of 5 year. It indicates that there is mixed trend in quick ratio during the year 2015-16 to 2019-20. Removing short-term debt from balance sheet allow companies to have better  quick and current ratios and allow to save some of liquidity  in the near term and put in to better use.  Companies are suggested to adopt more aggressiveness in maintaining their current rasio.

A Study On Comparison About Working Capital Management Of State Bank Of India And Industrial Credit And Investement Corporation Of India

Think India ◽  
2019 ◽  
Vol 22 (2) ◽  
pp. 251-276
Author(s):  
S. DEVI ◽  
R.POORNIMA RANI
Keyword(s):  
Main Theme ◽  
Managerial Accounting ◽  
Capital Management ◽  
Working Capital ◽  
Current Ratio ◽  
Efficient Operation ◽  
Working Capital Management ◽  
Satisfactory Level ◽  
Current Asset

Working capital management refers to a company's managerial accounting strategy designed to monitor and utilize the two components of working capital, current assets and current liabilities, to ensure the most financially efficient operation of the company. The goal of working capital management is to manage the firm’s current asset and current liabilities in such a way that satisfactory level of working capital is maintained. A study on comparison in working capital management with State Bank of India and Industrial Credit and Investment Corporation of India is analyzed to know the liquidity and current ratio. The interaction between current asset and current liabilities is therefore is the main theme of the theory of working capital management.

scholarly journals The Impact of Working Capital Management on Profitability: The Case of Small and Medium-Sized Export Companies in Tunisia

2011 ◽  
Vol 15 (3) ◽  
pp. 71-88 ◽  
Author(s):  
Meryem Bellouma
Keyword(s):  
Negative Relationship ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Random Effects Models ◽  
Accounts Receivable ◽  
Cash Conversion Cycle ◽  
Fixed And Random Effects ◽  
Financial Decision ◽  
The Impact

Working capital is an important component in the financial decision of the company. An optimal working capital management is reached through a trade off between profitability and liquidity. This study aims to provide empirical evidence about the effects of working capital management on the profitability of 386 Tunisian export SMEs observed from 2001 to 2008. The results of fixed and random effects models show a negative relationship between corporate profitability and the different working capital components. This reveals that Tunisian export SMEs should shorten their cash conversion cycle by reducing the number of days of accounts receivable and inventories to increase their profitability.

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