Authors

1. M. Sakthivel Murugun
2. Mr. V.R. Sridhar

Affiliation

• Principal D.B. Jain College Thorapakkam Chennai
• Manager - Finance Sundaram - Clayton Limited Chennai

Abstract

This paper examines the Impact of Negative Working Capital Management on the Profitability of Indian Automobile manufacturing companies. Moreover the study outlines the main factors that basically determine the working capital in the financials of Indian automobile sector. All the researches on this topic conclude that the companies should avoid under-investment in working capital if they want higher profit margins. With negative working capital there can be a danger of insolvency but it is not true for ever. If the company is having good image in the market and good relation with their creditors it can get the benefit from the negative working capital also. Figures were collected from the published Annual Reports of five Indian Automobile manufacturing companies listed in India from 2007 to 2012. The association between working capital and profitability examined and the results proved that there is inverse and positive association between negative working capital management and profitability in Indian Automobile sector.

Keywords

Capital on Profitability

References

1. http://www.money.rediff.com/companies /Tata-Motors -Ltd/0510008/ratio
2. http://www.moneycontrol.com
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