• Dr. Ritesh Kumar

“Working capital is the lifeblood and controlling nerve center of a business.” The amounts which a firm invests in working capital are often high in proportion to the total assets employed so it is necessary to use these amounts efficiently and effectively. Therefore, working capital management aims to maintain a balance between liquidity and profitability while conducting the day-to-day operations of the business concern. Working capital management plays a significant role in the improved profitability of a firm. With the help of this, firms are capable of gaining sustainable competitive advantage by employing effective and efficient utilization of the amounts of the organization. The main purpose of any firm is to maximize profit but maintaining liquidity is also an important objective. In a firm, there should be a proper balance between profitability and conducting its day-to-day operations. Because inadequacy of working capital may lead to insolvency of a firm and excessive funds implies idle funds which earn no profits. The management can take the help of various techniques like comparative statements, cash flows statements, cost–volume–profit analysis, ratio analysis, etc. to evaluate its financial performance. This paper aims to analyze the effect of working capital management on a firm’s profitability.

Working Capital, Profitability, Firm, Cash, Management

"EFFECTS OF WORKING CAPITAL MANAGEMENT ON FIRM’S PROFITABILITY", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.10, Issue 1, page no.e417-e419, January-2023, Available :http://www.jetir.org/papers/JETIR2301461.pdf

"EFFECTS OF WORKING CAPITAL MANAGEMENT ON FIRM’S PROFITABILITY", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.10, Issue 1, page no. ppe417-e419, January-2023, Available at : http://www.jetir.org/papers/JETIR2301461.pdf