A Study On Working Capital Management With Special Reference To Oil India Limited

Abstract

Administration of Working Capital is a essential chore for every manager in an organization, because it directly affects the liquidity and profitability of an organization. The present study examines the importance of working capital management and its impact on profitability of Oil India Limited. A few important ratios have been measured for prominence the effectiveness of working capital management. Pearson’s simple correlation coefficient has been applied for measuring the degree of relationship between the working capital management and profitability. The results inferred that out of eight ratios relating to working capital management, four ratios, viz., Current Ratio, Current Assets to Total Assets Ratio, Current Assets to Sales Ratio, and Cash Turnover Ratio, registered positive association with the selected profitability ratio (ROI), and the remaining ratios like Debtors Turnover Ratio, Inventory Turnover Ratio, Working Capital Turnover Ratio and Quick Ratio witnessed a negative association with the selected profitability ratio.