Working capital and fmcg industry project of latest 2016

pdf of working capital and fmcg industry

ABSTRACT

Design/methodology/approach: We have taken all 7 firms that are listed on BSE's FMCG sector for the purpose of our study. We had taken annual data from 1991 till 2011from CMIE, prowess data base. We took return on total assets as a measure of profitability and average inventory turnover days, average collection period, average payable period and cash conversion cycle as various exogenous variables. After conducting multicollinearity check and Hausman test, we ran panel regression through random effect method. Findings: The study indicates that all the variables were significant when average collection period factor was dropped and all factors except average inventory turnover days were significant when cash conversion cycle was dropped. This proves that aggressive and conservative working capital management policies affect profitability. Practical implications: The different analyses have identified critical management practices that will assist the managers in improving corporate profitability by improving their operations in working capital management in FMCG sector. Research Gap: Literature review shows that researchers have conducted a number of studies in manufacturing sector and telecom sector. We could not find a study on working capital management policy of FMCG sector which was one of the reasons for motivating us to conduct a International Journal of Trends in Finance © ISSN:0976-9736 Volume 1 issue 2 Feb 2013 Purpose: The purpose of this study is to find out the relationship of working capital management policies on the profitability of FMCG sector's firms listed in Bombay Stock Exchange (BSE) FMCG sector index. The period of study was from 1991 till 2