A Comprehensive Study on Working Capital Management and its Impact on Profitability and Operational Efficiency

A Comprehensive Study on Working Capital Management and its Impact on Profitability and Operational Efficiency M.Harini M.Harini Department of Management Studies, School of Management Studies, Vels Institute of Science, Technology and Advanced Studies, Pallavaram, chennai Dr M.Kotteeswaran Dr M.Kotteeswaran Department of Management Studies, School of Management Studies, Vels Institute of Science, Technology and Advanced Studies, Pallavaram, chennai

Working capital management is a fundamental aspect of financial management that directly influences the liquidity, profitability, and operational efficiency of an organization. It involves the management of current assets such as inventory, receivables, and cash, along with current liabilities such as payables and short-term obligations. The efficiency with which these components are managed determines the financial health and sustainability of a business. This study aims to analyze the effectiveness of working capital management and its impact on profitability and operational efficiency. The research focuses on understanding how proper management of working capital components can improve cash flow, reduce operational costs, and enhance overall organizational performance. Both primary and secondary data have been used for analysis, and various financial tools such as ratio analysis and trend analysis have been applied. The findings of the study indicate that efficient working capital management leads to better financial performance, improved liquidity, and enhanced operational efficiency. The study also highlights the importance of maintaining an optimal balance between risk and return. Keywords: Working Capital, Profitability, Operational Efficiency, Liquidity, Financial Performance
04 28 2026 1 5 10.55041/ijcope.v2i4.850 https://ijcope.org/article/a-comprehensive-study-on-working-capital-management-and-its-impact-on-profitability-and-operational-efficiency/