The Impact of Working Capital Management on Firm Profitability Empirical Evidence From Indian Listed Firms

Abstract

newline With increasing dynamism in the external environment managers are finding it difficult to have optimum levels of working capital. Their challenge also gets enhanced because of increasing complexity of the business operations with supply chains spanning to not only large number of partners but also geography including offshore locations. The flow of capital both long term and short term has become fragile over the years. This poses challenges both for the policy makers and professionals in not only managing the working capital but also understanding the underlying reasons for fluctuations. The study aims to dissect the working capital operations and practices for large size listed companies in India to understand their challenges, operations, and strategies relating to working capital management. The study also aims to understand and explore the relationship between working capital management practices and firm profitability. newlineThe study concerns top listed companies based on market capitalization from the eligible universe. From the universe of Indian listed companies, a representative sample of large size Indian listed companies will be drawn using appropriate criteria. newlineThe universe for the study is the companies forming part of NIFTY 500 index.