WORKING CAPITAL MANAGEMENT OF PHARMACEUTICAL INDUSTRY
Abstract
Dr. Pravin Choudhary
Assistant Professor,VNS Business School,Bhopal
Â
 ABSTRACT:           Â
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.
Â
Key Words:
Profitability, Cipla ltd., Working Capital.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.