The Financial Healthiness of Working Capital Management and Profitability Analysis of Select Steel Companies in India

Gyan Management Journal
Year: 2017(Jan-Jun), Volume: (11), Issue. (1)
First page: (39) Last page: (49)
Online ISSN: A/F
Print ISSN: 2250-348X
doi: 

The Financial Healthiness of Working Capital Management and Profitability Analysis of Select Steel Companies in India
T. Venkatesan1 and Dr. S. K. Nagarajan2

1Research Scholar, Department of Management Studies, Bharathaiar University Coimbatore
2Assistant Professor, Tamilnadu Police Academy, Chennai

Corresponding author email id:

Received:
15 Feb 2017

Accepted:
17 Apr 2017

Online Published:
29 Jun 2017

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ABSTRACT

The intention of this paper was to study the relationship between working capital management strategy of a firm and its profitability analysis. The fixed effects estimation on select steel companies of India. Financial healthiness has been utilize as a determine of the working capital management, while gross operating profit is used as a substitute for a firm’s profitability analysis. The results reveal that cash conversion cycle of a company has a negative correlation with its profitability. The results also suggest that managers can improve the performance by diminishing the number of day’s receivables and increasing the number of day’s payables. Besides, the outcomes demonstrate that the working capital strategies ought to be formulated taking worldwide macroeconomic circumstances into concern. The findings emphasize the significance of efficient working capital management practices to improve the profitability of steel companies. 

Keywords

Healthiness, Working Capital, Regression Analysis, Current Assets, Liabilities.