The purpose of the article is to look into the impact of working capital management (WCM) on the profitability of Indian automobile companies. The article is based on financial data from automobile sector-listed firms in the BSE Dollex 200 from 2011 to 2020. For panel data analysis, a fixed effect model and a random effect model are used to identify the effects of WCM. Finding of this article revealed that there is a negative and significant impact of cash conversion cycle (CCC), inventory conversion period (ICP) and receivable collection period (RCP) on firm’s profitability in automobile industry in India. And highly recommended that CCC, ICP and RCP should be minimised to maximise the profitability in automobile industry in India.
AbuzayedB. (2012). Working capital management and firms’ performance in emerging markets: The case of Jordan. International Journal of Managerial Finance, 8, 155–179.
2.
AgyemangJ. K., YensuJ., & OtchereM. I. O. (2019). The impact of working capital management on profitability of Global Haulage Company, Ghana. Asian Journal of Economics, Business and Accounting, 12(4), 1–17.
3.
AhmedI., & KhanM. A. (2015). Determining the impact of working capital management on profitability: An empirical study of automobile sector in Pakistan. International Journal of Commerce and Management, 48, 61.
4.
AliJ., DinM. U., WarisA., TahirM., & KhanS. (2020). Working capital management and firms’ profitability: Dynamic panel data analysis of manufactured firms. Journal of Financial Risk Management, 9(04), 494.
5.
AliS. (2011). Working capital management and the profitability of the manufacturing sector: A case study of Pakistan’s textile industry. The Lahore Journal of Economics, 16(2), 141.
6.
AltafN., & AhmadF. (2019). Working capital financing, firm performance and financial constraints: Empirical evidence from India. International Journal of Managerial Finance, 15(4), 1–15.
7.
AltafN., & ShahF. A. (2018). How does working capital management affect the profitability of Indian companies?Journal of Advances in Management Research, 15(3), 347–366.
8.
Amponsah-KwatiahK., & AsiamahM. (2020). Working capital management and profitability of listed manufacturing firms in Ghana. International Journal of Productivity and Performance Management, 70(7), 1751–1771.
9.
AntonS. G., & Afloarei NucuA. E. (2021). The impact of working capital management on firm profitability: Empirical evidence from the Polish listed firms. Journal of Risk and Financial Management, 14(1), 9.
10.
AravindM. (2016). Influence of working capital metrics on profitability: A critical examination on Indian manufacturing sector. Kelaniya Journal of Management, 5(1), 58–80.
11.
AryawanI., & IndrianiA. (2020). Working capital management and profitability: Evidence from Indonesian manufacturing companies. Diponegoro International Journal of Business, 3(1), 36–46.
12.
AzamK. (2016). Effect of cash conversion cycle, firm size and leverage on productivity: A sectoral analysis in Pakistan [Doctoral dissertation]. Bahria University Islamabad Campus, Islamabad.
13.
BagchiB., ChakrabartiJ., & RoyP. B. (2012). Influence of working capital management on profitability: A study on Indian FMCG companies. International Journal of Business and Management, 7(22), 1.
14.
BrymanA., & CramerD. (2012). Quantitative data analysis with IBM SPSS 17, 18 & 19: A guide for social scientists. Routledge, London.
15.
ChandA., AkramS., AkramH., MuradA. & KareemL. (2019). The impact of working capital management on firm profitability: A comparison between seasonal and non-seasonal businesses. Research Journal of Finance and Accounting, 10(15), 8–12.
16.
ChowdhuryA. Y., AlamM. Z., SultanaS., & HamidM. K. (2018). Impact of working capital management on profitability: A case study on pharmaceutical companies of Bangladesh. Journal of Economics, Business and Management, 6(1), 27–35.
17.
DoanT. (2019). Working capital management and profitability of fisheries enterprises by applying GMM. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 11(5), 1–9.
18.
EvciS., & ŞakN. (2018). The effect of working capital management on profitability in emerging countries: Evidence from Turkey. Financial Management from an Emerging Market Perspective, 2018, 205–218.
19.
Fernández‐LópezS., Rodeiro‐PazosD., & Rey‐AresL. (2020). Effects of working capital management on c firms’ profitability: Evidence from cheese‐ producing companies. Agribusiness, 36(4), 770–791.
20.
GeorgeE. (2019). A study of the impact of inventory management on profitability of firms with special reference to steel industry. International Journal of Basic and Applied Research, 9(5), 756–762.
21.
GołaśZ. (2020). Impact of working capital management on business profitability: Evidence from the Polish dairy industry. Agricultural Economics, 66(6), 278–285.
22.
HarrisA. (2005). Working capital management: Difficult, but rewarding. Financial Executive, 21(4), 52–54.
23.
HögerleB., CharifzadehM., FerenczM., & KostinK. B. (2020). The development of working capital management and its impact on profitability and shareholder value: Evidence from Germany. Strategic Management, 25(2), 27–39.
24.
HossainT. (2020). The effect of working capital management on profitability: A study on manufacturing companies in Bangladesh. International Journal of Research in Business and Social, Science (2147–4478), 9(6), 114–122.
25.
JindalD., JainS., & VartikaK. (2017). Effect of receivables management on profitability: A study of commercial vehicle industry in India. Management, 2(2), 246–255.
26.
KasahunA. K. (2020). The impact of working capital management on firms’ profitability-case of selected sole proprietorship manufacturing firms in Adama City. IOSR Journal of Economics and Finance (IOSR-JEF), 11(1), 45–55.
27.
KasiranF. W., MohamadN. A., & ChinO. (2017). Working capital management efficiency: A study on the small medium enterprise in Malaysia. Procedia Economics and Finance, 35, 297–303.
28.
KhanM. M., ShagorM. I. H., KalamA., & AhmedM. S. (2020). Working capital management and firm profitability in the textile industry of Bangladesh. International Journal of Science and Business, 4(7), 118–127.
29.
KipkemoiP., KiruK., & KoimaJ. K. (2018). Effect of inventory and cash conversion cycles on financial performance of listed commercial and service firms in Nairobi Securities Exchange Kenya. Scholars Journal of Economics Business and Management (SJEBM), 1(1), 997–1002.
30.
LazaridisI., & TryfonidisD. (2006). Relationship between working capital management and profitability of listed companies in the Athens stock exchange. Journal of Financial Management and Analysis, 19(1), 26–35.
31.
LeB. (2019). Working capital management and firm’s valuation, profitability and risk. International Journal of Managerial Finance, 15(2), 191–204.
32.
MahatoJ., & JagannathanU. K. (2016). Impact of working capital management on profitability: Indian telecom sector. Journal of Management and Commerce, 2(2), 17–23.
33.
MakoriD. M., & JagongoA. (2013). Working capital management and firm profitability: Empirical evidence from manufacturing and construction firms listed on Nairobi securities exchange, Kenya. International Journal of Accounting and Taxation, 1(1), 1–14.
34.
MbulaK. J., MembaS. F., & NjeruA. (2016). Effect of accounts receivable on financial performance of firms funded by government venture capital in Kenya. IOSR Journal of Economics and Finance, 7(1), 6269.
35.
MuneneF., & TibbsC. Y. (2018). Accounts receivable management and financial performance of Embu Water and Sanitation Company Limited, Embu County, Kenya. Kenya: International Academic Journal of Economics and Finance, 2018, 1–59.
36.
NadeemM., WarisM., AsadullahM., & KamranM. (2020). impact of working capital policies on firm’s performance, evidence from Pakistan. Journal of International Business and Management, 3(1), 1–20.
37.
NaskarA., & GuhaP. (2017). Working capital management and firm profitability: A study of listed companies in India. International Journal of Management (IJM), 8(6), 152–162.
38.
NejadD. A., BandarianA., & GhatebiM. (2015). Effect of working capital management on the profitability of listed companies in Tehran Stock Exchange. Journal of Life Science and Biomedicine, 5(1), 21–25.
39.
NgH., ChenY., San OngT., & TehB. H. (2017). The impact of working capital management on firm’s profitability: Evidence from Malaysian listed manufacturing firms. International Journal of Economics and Financial Issues, 7(3), 662–670.
40.
NwudeE. C., AllisonP. U., & NwudeC. A. (2020). The relationship between working capital management and corporate returns of cement industry of emerging market. International Journal of Finance & Economics, 26(1).
41.
OlagunjuA. O., NwaobiaA. N., & OgundajoG. O. (2020). Working capital and profitability of listed hotel companies in Nigeria. African Journal of Hospitality, 9(4), 669–684.
42.
OlaoyeS. A., & OkunadeR. A. (2020). Working capital management and profitability of listed manufacturing firms in Nigeria. Journal of Economics, Management and Trade, 26(7), 63–69.
43.
PaulP., & MitraP. (2018). Analysis of the effect of working capital management on profitability of the firm: Evidence from Indian steel industry. Asia-Pacific Journal of Management Research and Innovation, 14(1–2), 32–38.
44.
PhamK. X., NguyenQ. N., & NguyenC. V. (2020). Effect of working capital management on the profitability of steel companies on Vietnam stock exchanges. The Journal of Asian Finance, Economics, and Business, 7(10), 741–750.
45.
PhuongN., & HungD. (2020). Impact of working capital management on firm profitability: Empirical study in Vietnam. Accounting, 6(3), 259–266.
46.
PonsianN., ChrispinaK., TagoG., & MkiibiH. (2014). The effect of working capital management on profitability. International Journal of Economics, Finance and Management Sciences, 2(6), 347–355.
47.
PrasadP., SivasankaranN., & ShuklaA. (2019). Impact of deviation from target working capital on firm profitability: Evidence from India. International Journal of Productivity and Performance Management, 68(1), 1510–1527.
48.
PrsaD. (2020). The impact of working capital management on the profitability of Croatian manufacturing SMEs. Ekonomski Vjesnik, 33(2), 371–382.
49.
RahemanA., & NasrM. (2007). Working capital management and profitability case of Pakistani firms. International Review of Business Research Papers, 3(1), 279–300.
50.
SandersA., ElangeswaranC., & WulfsbergJ. P. (2016). Industry 4.0 implies lean manufacturing: Research activities in industry 4.0 function as enablers for lean manufacturing. Journal of Industrial Engineering and Management (JIEM), 9(3), 811–833.
51.
SathyamoorthiC. R., MapharingM., & SelinkieP. (2018). The impact of working capital management on profitability: Evidence from the listed retail stores in Botswana. Applied Finance and Accounting, 4(1), 82–94.
52.
ShahS. A., & SanaA. (2006). Impact of working capital management on the profitability of oil and gas sector of Pakistan. Editor-In-chief or European Journal of Scientific Research, 15(3), 301–307.
53.
ShinH. H., & SoenenH. L. (1998). Efficiency of working capital and corporate profitability. Financial Practice and Education, 8(2), 37–45.
54.
SinghS., & KaurH. (2017). Working capital management and profitability: Evidence from selected steel manufacturing companies in India. Indian Journal of Commerce and Management Studies, 8(2), 73.
55.
SinghaniaM., SharmaN., & RohitJ. Y. (2014). Working capital management and profitability: Evidence from Indian manufacturing companies. Decision, 41(3), 313–326.
56.
SunilrajN. V. (2020). Working capital management: Its impact on liquidity and profitability—A study of Kerala Minerals and Metals Ltd. International Journal of Research-Granthaalayah, 8(5), 199–207.
57.
UsmanR. D., & KarayeY. I., & AbubakarA. (2020). Impact of inventory management on profitability of listed pharmaceutical firms in Nigeria. International Journal of Research Publications, 44(1), 1–16.
58.
YazdanfarD., & ÖhmanP. (2014). The impact of cash conversion cycle on firm profitability: An empirical study based on Swedish Data. International Journal of Managerial Finance, 10(4), 442–452.
59.
YilmazI., & AcarG. (2019). The effect of cash conversion cycle on profitability in Omani Companies. International Journal of Economics, Management and Accounting, 27(2), 269–290.
60.
YusufM. B. (2019). The impact of working capital management practice on firm profitability: Evidence from manufacturing firms listed in Istanbul Stock Exchange. Journal of International Social research, 12(62), 1645–1655.
