• Ashvinkumar M. Patel

The purpose of this study is to examine the effect of working capital management on profitability of textile companies and compare working capital management practices of profitable companies and non-profitable companies. For this purpose, 20 textile companies are selected as a sample which include 10 profitable companies and 10 non-profitable companies. This research cover data of five years from 2013 to 2017. Which textile company’s average net profit margin for this period is positive is consider as a profitable company and which company’s average net profit margin is negative for this period is consider as a non-profitable company. In these research, ratio analysis has been used to evaluate working capital management practices of companies while correlation analysis has been used to find out type of relationship between working capital management and profitability of textile companies. Average Collection Period(ACP), Inventory Conversion Period(ICP), Average Payable Period(APP), Cash Conversion Cycle(CCC), Inventory to Current Assets Ratio(ITCA), Cash to Current Assets Ratio(CTCA) has been used in this research. To compare working capital management practices of profitable companies and non-profitable companies, descriptive statistics has been used in this study. This research found that profitability of company is significantly and negatively related with average collection period, inventory conversion period, average payable period and cash conversion cycle while significantly and positively related with current ratio. This research also found that level of inventory and level of cash has no significant impact on textile companies’ profitability. The key findings of comparative study were (1) Profitable companies averagely take so less time to collect their amount of credit sales in compare of non-profitable companies. (2) Non-profitable companies averagely take more time to convert its’ inventory into sales in compare of profitable companies. (3) Profitable companies make payment to their trade payable more rapidly in compare of non-profitable companies. (4) Profitable companies cash conversion cycle is low in compare of non-profitable companies. (5) Non-profitable companies’ average current ratio for research period is low in compare of non-profitable companies average current ratio.

Working Capital Management, Profitability, Textile Companies, Average Collection Period, Inventory Conversion Period, Average Payable Period, Cash Conversion Cycle, Inventory to Current Assets Ratio, Cash to Current Assets Ratio.

"Working Capital Management Practices: Profitable Textile Companies vs. Non-profitable Textile Companies", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.5, Issue 5, page no.JETIR1805280 508-512, May-2018, Available :http://www.jetir.org/papers/JETIR1805280.pdf

"Working Capital Management Practices: Profitable Textile Companies vs. Non-profitable Textile Companies", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.5, Issue 5, page no. ppJETIR1805280 508-512, May-2018, Available at : http://www.jetir.org/papers/JETIR1805280.pdf