IJCOPE Journal

UGC Logo DOI / ISO Logo

International Journal of Creative and Open Research in Engineering and Management

A Peer-Reviewed, Open-Access International Journal Supporting Multidisciplinary Research, Digital Publishing Standards, DOI Registration, and Academic Indexing.
Journal Information
ISSN: 3108-1754 (Online)
Crossref DOI: Available
ISO Certification: 9001:2015
Publication Fee: 599/- INR
Compliance: UGC Journal Norms
License: CC BY 4.0
Peer Review: Double Blind
Volume 02, Issue 6

Published on: June 2026

IMPACT OF WORKING CAPITAL MANAGEMENT ON PROFITABILITY OF LISTED MANUFACTURING COMPANIES IN INDIA

M.Phil Dharshini E Dharani Lakshmi R Dimple Tharani D

Dr.A.Aleeswari

DOI:https://doi.org/10.55041/ijcope.v2i6.125

Article Status

Plagiarism Passed Peer Reviewed Open Access

Available Documents

Download PDF Review Report

Abstract

This empirical study investigates the effect of Working Capital Management (WCM) on the profitability of 120 manufacturing firms in India during FY2018-19 to FY2022-23, resulting in 720 observations collected from the Prowess IQ (CMIE) database and BSE annual reports.


Four WCM variables — CCC, ICP, RCP, and APP — were used as independent variables, while ROA, ROE, and GOP served as dependent variables. Both Fixed Effects (FE) and Random Effects (RE) panel regression models were employed, with the Hausman specification test validating FE as the appropriate estimator across all three models.


Key findings show a significant negative relationship between CCC and ROA (β = −0.127, p < 0.01), ICP and ROA (β = −0.098, p < 0.01), and RCP and ROA (β = −0.084, p < 0.05), while APP is positively related to profitability (β = +0.073, p < 0.05). All four research hypotheses are supported.


Sector-wise analysis indicates that the textile and pharmaceutical sectors carry the highest CCC values, and therefore hold the greatest potential for profitability improvement through WCM optimization. The findings carry significant implications for financial management, policy, and future research in India

How to Cite this Paper

M.Phil, , E, D., R, D. L. & D, D. T. (2026). Impact of Working Capital Management on Profitability of Listed Manufacturing Companies in India. International Journal of Creative and Open Research in Engineering and Management, <i>02</i>(6). https://doi.org/10.55041/ijcope.v2i6.125

M.Phil, , et al.. "Impact of Working Capital Management on Profitability of Listed Manufacturing Companies in India." International Journal of Creative and Open Research in Engineering and Management, vol. 02, no. 6, 2026, pp. . doi:https://doi.org/10.55041/ijcope.v2i6.125.

M.Phil, ,Dharshini E,Dharani R, and Dimple D. "Impact of Working Capital Management on Profitability of Listed Manufacturing Companies in India." International Journal of Creative and Open Research in Engineering and Management 02, no. 6 (2026). https://doi.org/https://doi.org/10.55041/ijcope.v2i6.125.

Search & Index

Google Scholar Crossref DOI ResearchGate

References


  1. Abuzayed, B. (2012). Working capital management and firms’ performance in emerging markets: The case of Jordan. International Journal of Managerial Finance, 8(2), 155–179.

  2. Altaf, N., & Shah, F. A. (2018). Investment in working capital, financial constraints and financial performance: Evidence from Indian manufacturing firms. Global Business Review, 19(5), 1233–1247.

  3. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.

  4. Bhattacharya, H. (1988). Working Capital Management: Strategies and Techniques. Prentice Hall of India.

  5. Boruah, P. (2023). Impact of working capital management on profitability of Indian manufacturing companies. International Journal of Financial Management and Economics, 6(2), 112–124.

  6. Deloof, M. (2003). Does working capital management affect profitability of Belgian firms? Journal of Business Finance & Accounting, 30(3– 4), 573–588.

  7. García-Teruel, P. J., & Martínez-Solano, P. (2007). Effects of working capital management on SME profitability. International Journal of Managerial Finance, 3(2), 164–177.

  8. Garg, M. C., & Singh, M. (2024). Does working capital management affect financial performance? Empirical evidence of Indian manufacturing sector. Journal of Marketing Analytics. Sage Publications.

  9. Gill, A., Biger, N., & Mathur, N. (2010). The relationship between working capital management and profitability: Evidence from the United States. Business and Economics Journal, 10(1), 1–9.

  10. Hausman, J. A. (1978). Specification tests in econometrics. Econometrica, 46(6), 1251–1271.

Ethical Compliance & Review Process

  • •All submissions are screened under plagiarism detection.
  • •Review follows editorial policy.
  • •Authors retain copyright.
  • •Peer Review Type: Double-Blind Peer Review
  • •Published on: Jun 11 2026
CCBYNC

This article is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. You are free to share and adapt this work for non-commercial purposes with proper attribution.

View License
Back to Volume 02, Issue 6View All Issues Next Article

← Previous Article

Impact of Women on Corporate Boards

Next Article →

Indian Aesthetics and Literature
Scroll to Top