International Journal of Marketing, Financial Services & Management Research Vol.1 Issue 8, August 2012, ISSN 2277 3622
WORKING CAPITAL MANAGEMENT OF CIPLA LIMITED: AN EMPIRICAL STUDY
MR. LALIT KUMAR JOSHI*; MR. SUDIPTA GHOSH**
*Lecturer, Department of Commerce, The Bhawanipore Education Society College, Kolkata. **Assistant Professor, Department of Commerce, Prabhat Kumar College, Contai, Purba Medinipur. Guest Faculty, Department of MBA, Vidyasagar University, Midnapore.
ABSTRACT The present paper examines the working capital performance of Cipla Ltd. during the period 2004-05 to 2008-09. Financial ratios are applied in measuring the working capital performance and statistical as well as econometric techniques are employed in order to assess the behavior of the selected ratios. The empirical findings reveal significant positive trend growth in most of the selected performance indicators. Further, the selected ratios show satisfactory performances during the study period. Motaals test also indicates significant improvement in liquidity performance during the said period. Finally, there exists significant negative relationship between liquidity and profitability, which indicates that Cipla Ltd. has maintained post optimal level of liquidity (i.e., excess liquidity) during the period under study. KEYWORDS: Trend Growth Rates, Selected Ratios, Liquidity, Profitability, Post Optimal Level. ______________________________________________________________________________ 1. INTRODUCTION Working capital is meant to support the day to day normal operations of an enterprise. This working capital generates the important elements of cost viz., material, wages and expenses. This cost usually leads to production and sales in case of manufacturing concern and sales alone in case of others. One of the distinguishing features of the fund employed as working capital is that it constantly changes its form to drive the business wheel. It is also known as circulating...