Impact of working capital management on profitability of astmangal and its competitors

Abstract

This report shows the relationship between working capital and profitability of Astmangal, a wholesale and manufacturing firm, and their competitors, including Palm Jewellers, Senco Jewellers, S.M Gold, Kenvi Jewellers, and SKY Gold. The report also shows correlation and regression to examine whether profitability is affected by working capital. For the data collected for calculation, there data source completely relies on primarily data and secondary data of annual reports and primary data is received directly from Astmangal. and their competitor’s data is selected from their annual reports. The report shows a correlation between profitability and working capital management. This report highlights that working capital management has a positive impact on profitability. The analysis also shows companies with efficient working capital management, such as proper inventory turnover ratio, adequate trade receivable ratio and favourable trade payable ratio with suppliers, shows higher profitability ratios. Companies with improper working capital, such as higher inventory ratios, decrease in collection of accounts receivable, and unfavourable trade payable are likely to indicate lower profitability ratios.