Volume : VII, Issue : IX, September - 2017

Impact of Working Capital Management Practices of Automobile Companies on Profitability : An Evident From Bajaj Auto and Hero Motocorp

R. Suba, Dr. S. Rajalakshmi

Abstract :

 Financial management is considered to be the life blood of a business. The finances of the company may be categorized as long term financial requirements and short term or daily financial requirement. Long term financial requirement makes up the capital structure of a firm and mostly comprises of debt and equity. The daily requirement of fund is called Working Capital.  Working capital indicates the money required for daily operations of a business. A corporate pays a lot of importance on planning its long term capital needs. The sources and their cost are identified and then an optimum capital structure is designed. Not only long term funds and their cost affect the profitability of a firm but even working capital has an impact on profitability because effective working capital management is about striking a tradeoff between profitability and liquidity. With this background this research attempts to study the impact of working capital management practices in Bajaj Auto and Hero Motocorp, which belongs to 2 & 3 wheeler sector in India with significant investments in working capital i.e. inventory, receivables and cash. For examining the impact of working capital on profitability mean, standard deviation, co–efficient of variation, one sample ‘t’ test and multiple regression analysis have been applied. From the analysis, the researcher found that when compared to Bajaj Auto, Hero MotoCorp has registered significant growth through the impact of working capital on profitability during the study period. 

Keywords :

Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

R.SUBA, Dr.S.RAJALAKSHMI, Impact of Working Capital Management Practices of Automobile Companies on Profitability : An Evident From Bajaj Auto and Hero Motocorp, INDIAN JOURNAL OF APPLIED RESEARCH : Volume-7 | Issue-9 | September-2017


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