WORKING CAPITAL MANAGEMENT AND PROFITABILITY AN ANALYSIS OF MARUTI SUZUKI

Abstract

This study analyzes the impact of working capital management on profitability of an automobile Company Maruti Suzuki India Limited with particular focus on the relationship between the working capital management and the profitability of the company. The research will investigate the company's ability to use the short-term asset side of their balance sheet to service the short-term liabilities side and thereby ensure a liquid position and financial stability. Secondary data is then collected from the Audited Annual Reports of the 5-year period (2020-2025) and the most important working capital ratios are then analyzed. There are various indicators used to measure profitability, including net profit margin, ROA, and ROI. These variables are studied statistically using various tools such as correlation and regression analysis to determine the relationship amongst these variables. The results indicated that there is a significant relationship between the effective management of working capital and profitability as well as the overall financial performance. The findings from the research could be useful for financial managers, policy makers, and academia in the automotive industry to handle liqueidity, utilize the resources efficiently, and maximize profits in the long run. This study will try to find the relationship between working capital management and profitability for the Maruti Suzuki India Limited (MSIL) which is a pioneer in an automobile industry in India. Working capital management is the process of effectively managing the short-term assets and liabilities of an enterprise so that proper liquidity and continuity of operation is maintained. The management of these components is directly related to the profitability, solvency and financial performance of a company.