Working Capital Management and Corporate Profitability : A Panel Data Regression Model Analysis of Indian Cement Companies

This study is aimed at to provide empirical evidence about the impact of Working Capital Management on the profitability or financial performance of Indian Cement Industry for the period 2006 to 2015. The study utilized panel data econometrics of 30 top Indian cement companies, which are listed in Bombay Stock Exchange. Consequently, the empirical results from the summaries of the results of Panel Regression Analysis, shows that there exists a significant negative relationship between INV and ROA, which implies that, lesser the days of inventory holding period, higher, is the profitability. With respect to relationship between AR and ROA, a positive significant relationship is clearly found in between profitability and number of days of accounts receivables during the period of observation. About the relationship between AP and ROA, the result shows that, a negative relation exists in between number of day’s accounts payable and profitability, which is in consistent with the earlier studies with the view that less profitable firms wait longer to pay their bills. Furthermore, with respect to the relationship between CCC and ROA, the result shows that, there is a significant positive relationship between CCC and profitability, which implies that a decrease in the CCC generates lesser profit for a company