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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.
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ISSN: 3108-1754 (Online)
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ISO Certification: 9001:2015
Publication Fee: 599/- INR
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License: CC BY 4.0
Peer Review: Double Blind
Volume 02, Issue 10

Published on: October 2026

IMPACT OF INVENTORY MANAGEMENT EFFICIENCY ON FINANCIAL PERFORMANCE: A CROSS-SECTORAL STUDY OF NSE-LISTED COMPANIES

Maithreyan V M Jitendra Kumar

Faculty of Management and Commerce Ramaiah University of Applied Sciences,

Gnanagangothri Campus, MSR Nagar, Bengaluru-560054, India
DOI:https://doi.org/10.55041/ijcope.v2i10.078

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Abstract

The report we looked at the issue of what is the role of inventory management and working capital in the financial performance of 20 NSE listed companies we looked at over the FY 2016 to FY 2025 period. We looked at 4 industries which are cement, steel, FMCG, and pharmaceuticals with five companies in each. In terms of efficiency we used Inventory Days, Receivable Days, Payable Days, and Cash Conversion Cycle as our metrics. For financial performance we used Return on Assets, Return on Capital Employed, and Net Profit Margin as our indicators which we put to use. Also we included firm size, leverage, and industry as control variables. Out of 400 we planned for which was 200 firm year observations we did a cross check against the firms’ original audited financial reports. We confirmed 163 firm year observations and those we used in the report, the other 37 firm year we left out instead of estimating. The four sectors differ markedly across every measure. Firms that keep inventory longer generally report lower Return on Assets and Return on Capital Employed. Once firm size, leverage, and sector are taken into account, only the link with Return on Capital Employed remains statistically significant (β = −0.109, p = 0.008). A longer Cash Conversion Cycle follows the same pattern (β = −0.053, p = 0.033). The association with Return on Assets disappears after the controls are added, while Inventory Days shows no relationship with Net Profit Margin. These results indicate associations, not cause and effect, and apply only to the verified firm-years included in the companies and period examined.

Keywords: Inventory Management Efficiency, Cash Conversion Cycle, Financial Performance, Working Capital Management, NSE-Listed Companies, Cross-Sectoral Analysis.

How to Cite this Paper

M, M. V. & Kumar, J. (2026). Impact of Inventory Management Efficiency on Financial Performance: A Cross-Sectoral Study of NSE-Listed Companies. International Journal of Creative and Open Research in Engineering and Management, <i>02</i>(10), 1-9. https://doi.org/10.55041/ijcope.v2i10.078

M, Maithreyan, and Jitendra Kumar. "Impact of Inventory Management Efficiency on Financial Performance: A Cross-Sectoral Study of NSE-Listed Companies." International Journal of Creative and Open Research in Engineering and Management, vol. 02, no. 10, 2026, pp. 1-9. doi:https://doi.org/10.55041/ijcope.v2i10.078.

M, Maithreyan, and Jitendra Kumar. "Impact of Inventory Management Efficiency on Financial Performance: A Cross-Sectoral Study of NSE-Listed Companies." International Journal of Creative and Open Research in Engineering and Management 02, no. 10 (2026): 1-9. https://doi.org/https://doi.org/10.55041/ijcope.v2i10.078.

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  • •Peer Review Type: Double-Blind Peer Review
  • •Published on: Oct 14 2026
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