Impact of working capital management on profitability: Evidence from various sectors in the nifty 100 index

Abstract

This study examines the working capital management of various sectors and various companies from India during the 10 years study period from year 2010 to 2020. Many of the studies advocate a linear relationship between the working capital management and profitability, but in this study we investigate the existence of various possible relationships between various sectors and different companies in that particular sector. The distribution of working capital measure i.e. cash conversion cycle, debtors collection period, creditors payments period and inventory holding period were analyzed across sectors and companies and other factors affecting profitability like leverage, sales growth, frim size, current ratio, GDP growth rate have also been taken into consideration, as control variables.