SMART JOURNAL OF BUSINESS MANAGEMENT STUDIES	VOL. 8	NO. 2	PAPER 6
AN EMPIRICAL STUDY ON THE IMPACT OF WORKING CAPITAL MANAGEMENT ON PROFITABILITY: EVIDENCE FROM INDIAN SUGAR INDUSTRY
Ramachandran Azhagaiah* and Gopinathan Radhika**
*   Associate Professor of Commerce, Kanchi Mamunivar Centre for Post Graduate Studies, Puducherry, India
** Research Scholar in Commerce, Kanchi Mamunivar Centre for Post Graduate Studies, Puducherry, India
Every organization, whether profit oriented or not, depending upon its size and nature of business needs, requires Working Capital (WC). Efficient WC Management is an integral component of the overall corporate strategy to create shareholders’ value. The present study is aimed at analyzing the relationship between the Working Capital Management and the Profitability of Sugar Industry in India. It is proved that there is a significant positive coefficient with CR, INV and ROI at 5% level. Also there is a significant negative coefficient with QR, WCTR and ROI at 5% level. DTR has highly significant negative coefficient at 1% level with ROI. CTR has insignificant positive coefficient with profitability. The overall regression model fit is represented by R2, which is above 50% (0.51).

KEYWORDS: Inventory Turnover Ratio (INV), Return on Investment (Profitability), (ROI), Working Capital (WC), Working Capital Management (WCM), Working Capital Turnover Ratio (WCTR), Debtors Turnover Ratio (DTR), Creditors Turnover Ratio (CTR), Current Ratio (CR)

JEL CLASSIFICATIONS: G30, G31, G32

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