A Study of Working Capital Management and profitability of Auto Ancillaries – Gears Firms in India

Abstract

This paper aims to investigate working capital management practice of auto ancillaries – gear manufacturing sector. To examine the nine auto ancillaries – gear manufacturing companies over a time period of 2009 to 2018 listed on Indian stock exchanges were selected. The profitability was used as dependent variable and the working capital ratio has been used as independent variables to test the hypothesis. Data has been used analysing different descriptive methods containing auto correlations test, multiple regressions and multi co linearity test. It is observed that cash, bank and marketable security to sales ratio has positive relation with the profitability.The results show that Cash, bank and marketable security an important variable influencing the profitability.

Keywords: Working Capital,Cash, Bank, MarketableSecurities, Profitability.