WORKING CAPITAL MANAGEMENT OF PHARMACEUTICAL INDUSTRY

  • Pravin Choudhary VNS Business School,Bhopal

Abstract

Dr. Pravin Choudhary

Assistant Professor,VNS Business School,Bhopal

 

 ABSTRACT:            

This paper empirically investigates the relationship between the components of working capital and firms’ profitability of firms in Pharmaceutical industry. We undertake profitability (ROA) as a dependent variable and the inventory conversion period (ICP), the average collection period (ACP), the average payment period (APP), and the cash conversion Cycle (CCC) are used as independent variables, and are considered for measuring working capital management. The data was taken from secondary data source named as “Cipla Ltd.  covering the period from 2012-13 to 2016-17 . The Correlation result shows that profitability has insignificant positive relationship of average payment period and significant positive relationship of total assets. Even though, inventory conversion period, average collection period and cash conversion cycle were significant negatively related to profitability. The results show that for overall Pharmaceutical industry, working capital management has significant impact on profitability of the firms.

 

Key Words:

Profitability,  Cipla ltd., Working Capital.

Author Biography

Pravin Choudhary, VNS Business School,Bhopal
Assistant Professor

References

Dr. Pravin Choudhary
Assistant Professor,VNS Business School,Bhopal

ABSTRACT:
This paper empirically investigates the relationship between the components of working capital and firms’ profitability of firms in Pharmaceutical industry. We undertake profitability (ROA) as a dependent variable and the inventory conversion period (ICP), the average collection period (ACP), the average payment period (APP), and the cash conversion Cycle (CCC) are used as independent variables, and are considered for measuring working capital management. The data was taken from secondary data source named as “Cipla Ltd. covering the period from 2012-13 to 2016-17 . The Correlation result shows that profitability has insignificant positive relationship of average payment period and significant positive relationship of total assets. Even though, inventory conversion period, average collection period and cash conversion cycle were significant negatively related to profitability. The results show that for overall Pharmaceutical industry, working capital management has significant impact on profitability of the firms.

Key Words:
Profitability, Cipla ltd., Working Capital.
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How to Cite
Choudhary, P. (2019). WORKING CAPITAL MANAGEMENT OF PHARMACEUTICAL INDUSTRY. Innovare Journal of Business Management. Retrieved from https://innovareacademics.in/journals/index.php/ijbm/article/view/24984
Section
Original Article(s)