Working Capital Efficiency and Its Impact on Liquidity & Profitability: An Analysis of India's Maharatna Central Public Sector Enterprises

Abstract

Purpose of the study: This study focuses on the working capital management of Maharatna central public sector enterprises in India. Research Objectives: In the present study, we examine the impact of working capital management on the profitability of Maharatna companies. Also, identify the relationship between liquidity and profitability for Maharatna companies in India. Research Design: This study is descriptive and analytical in nature. This paper is based on secondary data; for the study,13 Maharatna companies have been taken into account. The study period is from 2020-21 to 2024-25. For the analysis of the data, ratio analysis, mean, correlation matrix, and multiple linear regression have been used. Findings: There is no significant relationship found between liquidity and profitability, except that ROE has a moderately positive correlation with QR. It has been concluded that only QR and ITR have a significant impact on ROE. Implications: This study will benefit academics and practitioners in the fields of finance and business management. Also, the study could provide insights into the strategic decision-making processes of Maharatna companies concerning their working capital management. Limitations: This study is time-bound only from 2020-21 to 2024-25. Also, only Maharatna companies. This study only covers working capital management; other financial management aspects are untouched.

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