Radhika, Gopinathan; Azhagaiah, Ramachandran
January 2012
International Journal of Research in Computer Application & Mana;Jan2012, Vol. 2 Issue 1, p107
Academic Journal
Working Capital (WC) is regarded as the lifeblood of a business. It plays a pivotal role in keeping the wheels of a business enterprise running. However, the management of WC is a delicate area as it involves complex decision-making. Every organization whether profit oriented or not, depends on its size and nature of business needs requisite amount of WC. Sugar Industry in India is well developed with a consumer base of more than billion of people. It is also the second largest producer of sugar in the world. There is around 45 millions of sugar cane growers in India and a larger portion of rural labourers in the country largely rely upon this industry. This paper is a maiden attempt on the impact of working capital management on profitability using liquidity ratios, and turnover ratios. Correlation and regression models are applied to associate the relationship and estimate the association between explained and explaining variables. The regression model viz., measure of WC management shows that the ratios like Current Ratio and Inventory Turnover Ratio have highly significant positive coefficient with profitability while Quick Ratio has significant negative coefficient with profitability.


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