WORKING CAPITAL MANAGEMENT - IT’S IMPACT ON LIQUIDITY AND PROFITABILITY - A STUDY OF KERALA MINERALS AND METALS LTD
Working capital management involves the various steps for the proper management of current assets and current liabilities which avoids the risk of a shortage of funds for meeting short-term obligations and eliminates the blocking of funds in current assets on the other hand. The present study makes an attempt to give a conceptual insight on working capital management and assess its impact on liquidity and profitability of Kerala Minerals and Metals Ltd. A proper tradeoff between profitability and liquidity is necessary for every enterprise to survive in any kind of environment. The study also made an attempt to analyse the liquidity and profitability position of KMML. For this, correlation and spearman’s rank has been used. The study covers ten-year data from 2009-10 to 2018-19. The correlation and spearman’s ranking method exhibits a weak correlation and negative relationship between liquidity and profitability. The Motaal’s test has also been applied to test the liquidity position. The liquidity ratios such as the current ratio and liquid ratios are higher than the benchmark which means that the liquidity position is good. The study indicates that the liquidity position of the enterprise has enhanced over the period of study.
“A Brief History, KMML”. http://kmml.com/php/showContent.php?linkid=10&partid=1
Biji James (2002). A study on financial strength, profitability and productivity of public sector chemical enterprises in Kerala, Ph. D Thesis, Thiruvananthapuram: University of Kerala.
Maradi, Salehi and Arianpoor (2012). A comparative study of working capital management of two groups of listed companies in Tehran Stock Exchange. International Journal of Advanced Research in Management and Social Sciences ISSN: 2278-6236 Vol. 1, No. 3, September 2012, www.garph.co.uk IJARMSS.
Government of Kerala (2016). Economic Review. Kerala, State Planning Board, Thiruvananthapuram.
Mishra R.K. (2001). Financial Management in Public Enterprises; Present Scenario and Challenges to Transition. Finance India, Vol. XV, No.2, pp. 546-547.
Misra, R.N, & Chinmay, Sahu (2000). A study on the preferred debt equity mix among Indian industries. Management Accountant, January 2000, pp. 48- 50.
Pandey, S. (2008). Impact of Working Capital Management in the Profitability of Hindrance Industries Limited, the ICFAI University Journal of Financial Economics, Vol. 36.
Shivakumar, and. N Babitha Thimmaiah. (2016). “working capital management - it’s impact on liquidity and profitability - a study of Coal India ltd.” International Journal of Research - Granthaalayah, 4(12), 178-187. https://doi.org/10.5281/zenodo.223836.
Singh, P. (2008). Inventory and Working Capital Management: An Empirical Analysis, The Icfai University Journal of Accounting Research, Vol. 35. Singh, J.P.
Sur, D. (2006). Efficiency of Working Capital Management in Indian Public Enterprises during the Post-liberalization Era: A Case Study of NTPC, The ICFAI Journal of Management Research, Vol. 34.
Kerala Minerals and Metals Limited. (2020). Ten-year financial highlights. Retrieved from Kerala Minerals and Metals Limited. website: http://kmml.com/php/showContent.php?linkid=66&partid=1.
Copyright (c) 2020 Sunilraj N.V
This work is licensed under a Creative Commons Attribution 4.0 International License.