Impact of Working Capital Management on Profitability: A Studyof the Select Indian Pharmaceutical Companies

Abstract

The smooth running of business operations demands an efficient management of working capital by properly managing the inventory, accounts receivables and accounts payables of the business. This helps companies not only fulfil their short-term financial commitments but also boost their earnings. Therefore, the present study aims at verifying the impact of working capital management on the profitability of the companies under pharmaceutical industry in India. For empirical analysis, the data of 618 pharmaceutical companies is taken over a period of seven years from 2014–2015 to 2020–2021 and multivariate panel data regression technique is applied on data for estimating the results. The findings of the study validate that the profitability of companies is significantly influenced by working capital management. These findings will provide an insight to corporate managers and owners of pharmaceutical companies in deciding appropriate working capital strategy.

Working Capital Management on the Firm’s Profitability of Steel Sector Firms in India

“…The influence of components of CCC and the overall CCC on profitability degree has been extensively researched and well established. Most of the research conducted so far find a positive association between ICP and APP and the organization’s profitability (Ahmed & Khan, 2017; Bavaliya & Mehta, 2019; Chowdhary et al, 2018; Jakpar et al, 2017; Kasahun, 2020; Kisanyanya, 2020; Munir, 2019; Ponsian et al, 2014).…”

“…Following (Ahmed & Khan, 2017; Bavaliya & Mehta, 2019; Chowdhary et al, 2018; Jakpar et al, 2017; Kasahun, 2020; Kisanyanya, 2020; Munir, 2019; Ponsian et al, 2014), the static panel models that are presented here have been implemented to analyze the influence that changes in the variables that are being studied have had across firms as well as the specific impact that regression models have had inside firms over a certain amount of time.…”