WORKING CAPITAL MANAGEMENT OF MAKSON HEALTHCARE PVT LTD: A TRADE -OFF BETWEEN LIQUIDITY AND PROFITABILITY, AN EMPIRICAL STUDY
Keywords:
Working Capital, Liquidity, Trade Off and Makson Healthcare Pvt Ltd, ProfitabilityAbstract
This paper makes an attempt to provide an insight into the conceptual side of working capital and to assess the impact of working capital management on liquidity, of Makson. Liquidity management is a prerequisite for the very survival of the concern. The short term creditors of the firm are primarily interested in knowing the firm’s ability to meet its current and short term obligations. And so liquidity and profitability trade off have become a crucial issue among any organization. The paper analyses the association between the liquidity management and profitability of Makson Group.
For analyzing the performance of liquidity management, the management accounting technique ratio analysis is used. And statistical techniques like measures of central tendency, measures of dispersion, Pearson correlation, and Spearman’s rank correlation have been used. The students’t test has been applied to test the significance of rank correlation coefficient.
The findings suggest that the liquidity is managed mostly by owners past experience and data and hence, there is no significant correlation between liquidity and profitability is seen. The originality of the paper is that it conceptualises liquidity management in Makson group as a learning process.
Downloads
References
Banerjee, B. (1973). Operating Cycle Concept of Working Capital, Journal of Accounting, December, 46-53.
Bhunia, Amalendu (2007). “Liquidity Management of Public Sector Iron & Steel Enterprise in India”, Vidyasagar University Journal of Commerce, Vol.12, March Issue.
Chakraborty, K. (2008), “Working Capital and Profitability: An Empirical Analysis of Their Relationship with Reference to Selected Companies in the Indian Pharmaceutical Industry,” The ICFAI Journal of Management Research
Chakraborty, P.K. and Bandopadhyay, K. (2007), “Strategic Working Capital Management: Case of a Turnaround Company,” ICFAI Reader
Emerging Market”, International Journal of Commerce & Management, Vol 14 No 2 pp. 48 – 61
Garcia-Teruel, P.J. and Martinez-Solano, P. (2007). Effects of working capital management on SME profitability, International Journal of Managerial Finance, Vol.3, Issue 2. Journal of Management Research ISSN 1941-899X 2011, Vol. 3, No. 2: E8 www.macrothink.org/jmr 22
Ghosh, S. K. and Maji, S. G. 2003. “Working Capital Management Efficiency: A study on the Indian Cement Industry”, The Institute of Cost and Works Accountants of India
Janakiramudu. P and Durga, Rao S. (2008). “Working Capital Management, A Review of Research”, Finance India, Indian Institute of Finance, Vol. 12, No. 1, March Issue.
Joshi, P. V. 1995. Working Capital Management under Inflation, 1st Ed. Anmol Publishers, pp. 20 – 93
Luther, C.T.R. (2007). Liquidity, Risk and Profitability Analysis: A Case Study of Madras Cements Ltd. 42(10), 784-789.
Mukhopadhyay, D.(2004). “Working Capital Management in Heavy Engineering Firms- A Case Study”, The Management Accountant, I.C.W.A.I.
Pandey, I. M., (2005), “Financial Management Theory and Practices”. Vikas Publishing Company, New Delhi.
Shin, H.H and Soenen, L. 1998. “Efficiency of Working Capital Management and Corporate Profitability”, Financial Practice and Education, Vol 8 No 2, pp 37-45
Singh, P. (2008). Inventory and Working Capital Management: An Empirical Analysis, The ICFAI University Journal of Accounting Research, Vol. 35.
Singh, J.P. and Pandey, S. (2008). Impact of Working Capital Management in the Profitability of Hindalco Industries Limited, The ICFAI University Journal of Financial Economics, Vol. 36.
Singh, Karamjeet and Chekol, Firew (2009), “Working Capital Management: Comparison of Policies and Performance”, The Indian Journal of Commerce, Vol. 62, No. 4 (October), pp. 34-44.
Smith, K. V., (1974), “Management of Working Capital”. McGraw Hill Education
Yadav, R.A. (1986). Working Capital Management – A Parametric Approach. The Chartered Accountant May,.
