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Analysis of Working Capital, ROA and Business Turnover for Firms in the FMCG, Manufacturing and Infrastructure Sectors in India

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  • Talwar SHALINI

    (K J Somaiya Institute of Management Studies and Research, Mumbai, India)

Abstract

This research examines the relationship between working capital, buniness turnover and ROA for listed Indian firms in the fast moving consumer goods (FMCG), manufacturing and infrastructure sectors. Annual accounting data collected over a decade has been analysed using both, OLS regression of independent samples as well as panel data study of pooled sample. The study tested the association between working capital and business turnover and working capital and return on assets. The results of regression run separately for each firm representing the sectors under the study support the hypotheses of the study only partially. However, the outcome of panel data analysis supports both the hypotheses for listed firms in India. The the study offers some key takeaways for the decision makers planning their working capital management strategies.

Suggested Citation

  • Talwar SHALINI, 2018. "Analysis of Working Capital, ROA and Business Turnover for Firms in the FMCG, Manufacturing and Infrastructure Sectors in India," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 3, pages 22-28.
    • Handle: RePEc:ddj:fseeai:y:2018:i:3:p:22-28
    DOI: https://doi.org/10.26397/eai1584040913
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    References listed on IDEAS

    as
    1. Marc Deloof, 2003. "Does Working Capital Management Affect Profitability of Belgian Firms?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30(3-4), pages 573-588.
    2. Azhagaiah Ramachandran & Muralidharan Janakiraman, 2009. "The Relationship between Working Capital Management Efficiency and EBIT," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 7(1), pages 61-74.
    3. Marc Deloof, 2003. "Does Working Capital Management Affect Profitability of Belgian Firms?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30(3‐4), pages 573-588, April.
    4. Sabo Muhammad & Rabi¡¯U Saminu Jibril & Usman Sani K/Wambai & Fatima Bello Ibrahim & Tjjani Habibu Ahmad, 2015. "The Effect of Working Capital Management on Corporate Profitability: Evidence from Nigerian Food Product Firms," Applied Finance and Accounting, Redfame publishing, vol. 1(2), pages 55-63, August.
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