Working Capital Management Essay

The Relationship between Working Capital Management E? ciency and ebit Azhagaiah Ramachandran Muralidharan Janakiraman This paper is aimed at analyzing the relationship between Working Capital Management E? ciency (wcme) and Earnings before Interest & Taxes (ebit) of the Paper Industry in India during 1997–1998 to 2005– 2006. To measure the wcme three index values viz. , Performance Index (pi), Utilization Index (ui), and E? ciency Index (ei) are computed, and are associated with explanatory variables, viz. , Cash Conversion Cycle (ccc), Accounts Payable Days (apdays), Accounts Receivables Days (ardays), Inventory Days (invdays).

Further, Fixed Financial Assets Ratio (fixdfara), Financial Debt Ratio (findbtra) and Size (Natural log of Sales) are considered as control variables in the analysis, and are associated with the ebit. The study reveals that the Paper Industry has managed the wc satisfactorily. The apdays has a signi? cant (–)ve relationship with ebit, which indicates that by deploying payment to suppliers they improve the ebit. The Paper Industry in India performs remarkably well during the period, however, less pro? table ? rms wait longer to pay their bills, and pursue a decrease in ccc. Key Words: Working Capital Management E? iency, Earnings before Interest and Taxes, Current Assets, Current Liabilities, Performance Index, Utilization Index, E? ciency Index jel Classi? cation: g30, g32 Working Capital (wc) is the ? ow of ready funds necessary for the working of a concern. It comprises funds invested in Current Assets (cas), which in the ordinary course of business can be turned into cash within a short period without undergoing diminishing in value and without disruption of the organization. Current Liabilities (cls) are those which are intended to be paid in the ordinary course of business within a short time.

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Every company has to make arrangements for adequate funds to meet the day-to-day expenditure apart from investment Dr Azhagaiah Ramachandran is an Assistant Professor of Commerce in the Department of Commerce, Kanchi Mamunivar Centre for Post Graduate Studies, India. Muralidharan Janakiraman is a Research Scholar in the Department of Commerce, Kanchi Mamunivar Centre for Post Graduate Studies, India. Managing Global Transitions 7 (1): 61–74 62 Azhagaiah Ramachandran and Muralidharan Janakiraman in Fixed Assets (fas). The internal resources of a business organization often are insu? ient for meeting all its needs. Also it is not always possible for the owners, promoters or the entrepreneurs to mobilize ? nance from their personal resources. Resources, therefore, have had to be ? nanced through borrowing, keeping in view the short, medium and or long term requirements of trade or industry for funds. Statement of the Problems, Signi? cance and Scope One of the serious problems faced by the Paper Industry in India is the incidence of sickness. There are many reasons for the sickness of the paper industry. One of the important reasons is low per capita consumption of paper in India.

The industry experiences frequent dwindling demands and low ebit. The paper industry is highly capital intensive. Some of the units that are installed in the backward areas su? er from inadequate infrastructure facilities such as lack of trained manpower, transportation and sustained power supply, the failure of industry in maintaining adequate liquidity leading to imbalanced capital structure, thereby a? ecting ebit. Very few studies have been made in relation to Working Capital Management (wcm) especially in the paper industry in India. Therefore, the present study is a maiden attempt to analyze the relationship between wcm e? iency and ebit in the paper industry in India. The study covers only the listed paper companies on Bombay Stock Exchange (bse) in India, for which an attempt is made to provide an empirical support to the hypothesized relationship between wcm e? ciency and ebit. Objectives of the Study The objective of the study is to examine the relationship between the wcm e? ciency and ebit of the paper industry in India. The following are the speci? c objectives: • To analyse the ? rm’s e? ciency in wcm in the paper industry in India. • To analyse the relationship between wcm e? iency and ebit in selected companies in the paper industry in India. Review of the Literature Experts (William 1939) determined the factors of wc and pointed out that wc is an element to be considered in ? xing the rate-base. MainManaging Global Transitions Working Capital Management E? ciency and ebit 63 tenance of adequate wc is an essential condition for e? cient ? nancial management (Mohan 1991). wc o? ers huge cash opportunities that could be released with sustainability within a relative short period of time (Loneux 2004). Inventory, receivables, cash and working ? nance are the four problem areas of wcm (Mishra 1975).

Inventory represents more than 61% of the total cas of the ? rm (Swamy 1987). wc has been ? nanced from internal as well as external sources (Fazeeria 2002). Companies have increasingly been relying on short-term funds particularly short-term bank credit and trade credit (Gupta and Sharma 2003). wc ratios are useful tools in appraising the ? nancial strength and; immediate solvency of a ? rm (Sagan 1955). Current and quick ratios registered insigni? cant associations whilst the comprehensive liquidity index indicated signi? cant associations with return on investment (roi) (Smith and Bahaman 1997).

The lower the level of liquid assets, the greater will be the risks of not being able to meet current obligations (Van Horne 1969). The major reason for slow progress of an undertaking is shortage or wrong management of wc (Siddarth and Das 1993). Due to lack of a proper plan for wc requirements most ? rms often experience excess wc or shortage of wc (Agarwal 1977). Firms are able to reduce ? nancing costs/or increase the funds available for expansion by minimizing the amount of funds tied up in cas. There is a signi? cant di? erence among industries in wc measures across time (Krueger 2002).

The way in which wc is managed will have a signi? cant impact on the pro? tability of companies. This is a signi? cant (–)ve relation between gross operating income and the number of days of accounts receivable, inventories and accounts payables. The (–)ve relation between account payables and pro? tability is consistent with the view that less pro? table companies wait longer to pay their bills (Deloof 2003). The chief executives properly recognize the role of e? cient use of wc in liquidity and pro? tability, but in practice they could not achieve it due to suboptimum utilization of wc (Prasad 2001).

The Public Sector Enterprises (psus) could improve the wcme by reducing their dependence on outside funds (Jain 1988). E? cient wcm is necessary for achieving both liquidity and pro? tability of a company. A poor and ine? cient wcm leads to tie up funds in idle assets and reduces the liquidity and pro? tability of a company (Reddy and Kameswari 2004). E? cient liquidity management involves planning and controlling cas and cls in such a manner that eliminates the risk of Volume 7 · Number 1 · Spring 2009 64 Azhagaiah Ramachandran and Muralidharan Janakiraman nability to meet due short-term obligations and avoids excessive investment in these assets. The ccc has been one of the more important measures of liquidity than the current ratio that a? ects pro? tability. There is a (–)ve relationship between pro? tability and liquidity indicators such as current ratio and cash gap (Eljelly 2004). wcm could vitally a? ect the health of the ? rm (Sagan 1955). Industry practices, company size, future sales growth of company, the proportion of outside directors on a board, executive compensation (current portion), and ceo share ownership signi? cantly in? uence the wcme of a company (Kieschnick 1960).

For measuring wcme, performance, utilization, and overall e? ciency indices were used, instead of some common wcm ratios (Gosh and Maji 2003). There is a strong (–)ve relation between ccc and corporate pro? tability of a large sample of listed American companies during 1975–1994 (Shin and Soenen 1998). There is a signi? cant +ve relationship between pro? tability, measured through gross operating pro? t, and ccc. Pro? t can be created by handling correctly the ccc and keeping each of the different components (accounts receivables, accounts payables, inventory) to an optimum level (Lazaridis and Tryfonidis 2006).

There is a significant (–)ve relationship between wcm and pro? tability. The greater the ccc the lesser will be the pro? tability. There is a signi? cant (–)ve relationship between liquidity and pro? tability. There is also (–)ve relationship between debt used by the ? rm and its pro? tability (Rehmann 2007). h1 There is no signi? cant e? ciency in the use of various components of 0 cas for enhancing sales in the paper industry. 2 The paper industry as a whole does not have the ability to utilise all h0 the cas for the purpose of generating sales. 3 The paper industry, as a whole does not have e? iency in wcm. h0 h4 There is no signi? cant relationship between wcm e? ciency and ebit 0 of the paper industry in India. Although ample research studies have been conducted in the ? eld of wcm, very few researches touched on the aspects of wcm and ebit. Therefore, to ? ll this gap in the literature, the study has been undertaken. Methodology, Sources of Data and Sampling Design The study used only secondary data, which are collected from the cmie prowess (package). The collected data from this source have been compiled and used with due care as per the requirements of the study.

OrigManaging Global Transitions Working Capital Management E? ciency and ebit table 1 Sample procedure No. of companies 113 (78%) 33 (22%) 146 (100%) No. of companies listed in bse 66 (78%) 19 (22%) 85 (100%) Sample size 23 7 30 65 Type of companies Paper Paper product Total inally the sample for this study had been planned to choose from the list of companies listed in National Stock Exchange (nse). Since the number of companies listed in the nse is small (6 companies in the paper and paper product industry), the sample of 30 companies of paper industry has been chosen from 85 listed companies in bse.

The Sample Interval (si) is calculated by N/n. si = 85/30 = 2. 8333. All the bse listed paper and paper product companies are considered and every 3rd company is selected for the study by use of the Systematic Random Sampling Technique. The data used for the analysis relate to the selected paper companies for the period of ten years on a yearly basis ranging from 1997–2006. Variables Used for Analysis of Data analysis i: wcm efficiency The ? rst part of the analysis is the measure of wcm e? ciency for which three indexes are used, viz. , Performance Index (pi), Utilization Index (ui) and, E? ciency Index (ei). (1) N where Is = sales index de? ned as St /St? 1 , Wi = individual group of cas, N = number of cas group, and i = 1, 2, 3, . . . N. ui wcm = At? 1 , At (2) pi wcm = Is n Wi(t? 1) i=1 Wit where A = (current assets)/sales. eiwcm = pi wcm ? ui wcm . analysis ii: net ebit The second part of the analysis is the measure of Net ebit, for which the following equation is formulated, based on the basic indicator. Volume 7 · Number 1 · Spring 2009 (3) 66 Azhagaiah Ramachandran and Muralidharan Janakiraman The general form of the model is: ebitit = ? 1 (piit ) + ? 2 (uiit ) + ? 3 (eiit ) + ? 4 (cccit ) + ? (ffarit ) + ? 6 (fdrit ), (4) where ebitit = Earnings Before Interest & Tax (i at time t; i = 1, 2, 30 companies), ccc = Cash Conversion Cycle = No. of Days a/r + No. of Days Inventory – No. of days a/p; fdr = Financial Debt Ratio = (Fixed Financial Assets)/(Total Assets); ffar = Fixed Financial Assets Ratio = (Short Term Loans + Long Term Loans)/(Total Assets). Tools Used for Analysis To analyze the wcm e? ciency of the paper industry in India, statistical techniques viz Minimum, Maximum, Mean, Standard Deviation and Coe? cient of Variation, Correlation, and Regression Matrix have been used.

To ascertain the linear trend and sign of growth in various components of wc ratios, the simple regression technique has been extensively used. Limitations and Scope for Further Study • The study is con? ned to ten years data only, i. e. from 1997–2006, therefore, a detailed analysis covering a lengthy period, which may give slightly di? erent results has not been made. • The study is based on secondary data collected from the cmie prowess (package), therefore the quality of the study depends purely upon the accuracy, reliability and quality of the secondary data source.

Approximation, and relative measures with respect to the data source might impact the results. • The study is based on 30 companies of the Paper Industry in India that are also drawn from the companies listed in bse. Therefore, the accuracy of results is purely based on the data of sample units. If one takes sample units from, say, nifty the results may go slightly di? erently. Further studies could be made by future researchers in the following aspects and areas: • by inclusion of extraneous variables like pro? tability ratios (g/p ratio, n/p ratio, etc) and analyzing the inter-relationship between the wcme and pro? ability; Managing Global Transitions Working Capital Management E? ciency and ebit 67 • by categorizing the ? rms into heterogeneous groups like Small, Medium, and Large ? rms based on measures like assets, capital, long term borrowings, and Net Worth. Industry Analysis and Findings An evaluation of wcm e? ciency of the paper industry as a whole is done here. It can be observed vide table 2 that there are occurrences of the pi, ui and ei values of above 1 in 3, 5 and 4 respectively out of 9 years. In many years, pi and ei values are < 1, but mean value of pi is nearer to 1 (0. 93) and ei value is 1. 1. This shows that the Paper Industry has satisfactorily managed its wc while handling its cas for generating sales and has adopted a moderate wcm policy. But, the incidences of the occurrence of the most successful year (ei > 1) followed by the most unsuccessful one (ei < 1), and vice versa, have exposed the fact that the industry has been ine? cient in adopting a very sound wcm policy. Moreover, the coe? cient of variation (cv), which is very high at 49. 12 when compared to that of pi, ui and ei, elicits the high degree of inconsistency in the wcm policy adopted by the paper industry.

Further, Compounded Annual Growth Rates (cagrs) are (–)ve for all the indices. This, in turn, reveals that the e? ciency in managing wc required for various components of cas relevant to augmenting the sales as well as wcm policy has been kept weakening further over the period of study. Overall, it can be inferred that the Paper Industry has shown low e? ciency in wcm relevant to manufacturing activities, and has been ine? cient in adopting a sound wcm policy on the whole during the period of study. Regression Analysis and Results In order to measure the ? rm’s e? ciency in achieving the targeted level of e? iency during the study period, the ols model has been used. The estimated ? value represents the speed of the individual ? rm in improving the e? ciency in achieving the industry norms in this regard. Firm’s e? ciency in the matter of managing wc is equal to the average e? ciency level of the industry as a whole. Similarly, < 1 indicates the need of the ? rm to further improve its e? ciency in wcm. Management of wc is an essential condition of ? nancial management (Reddy 1991). The wcm has highlighted the managerial aspects of inventories, receivables and advances, and cash (Rao 1985).

The wcme has been tested through a hypothesis in terms of various components of cas. Volume 7 · Number 1 · Spring 2009 68 Azhagaiah Ramachandran and Muralidharan Janakiraman Average Performance, Utilization and E? ciency Indices showing the wcm E? ciency of the Paper Industry Performance Index 1. 47 0. 65 1. 12 0. 79 0. 71 1. 17 0. 71 0. 97 0. 77 0. 65 (1999) 1. 47 (1998) 0. 93 0. 27 29. 54 –3. 15 Utilization Index 1. 35 0. 75 1. 26 1. 05 0. 84 1. 21 0. 89 1. 06 0. 93 0. 75 (1999) 1. 35 (1998) 1. 04 0. 20 19. 67 –1. 67 E? ciency Index 1. 98 0. 49 1. 41 0. 83 0. 60 1. 42 0. 3 1. 03 0. 71 0. 49 (1999) 1. 98 (1998) 1. 01 0. 50 49. 12 –4. 77 table 2 Financial Year 1997–1998 1998–1999 1999–2000 2000–2001 2001–2002 2002–2003 2003–2004 2004–2005 2005–2006 Minimum Maximum Mean sd cv cagr notes Computed from Financial Statements; ? gures in parentheses are years. h1 There is no signi? cant e? ciency in use of various components of cas 0 for enhancing sales in the paper industry. The h1 is rejected; numerically the overall pi (> 1) indicates e? cient 0 wcm. Average value of pi, as a whole, shows that the pi is > 1 for 17 ? rms out of 30 ? rms.

Thus, the performance of the industry as whole in wcm was mostly e? cient during the period of study. Similarly, from the ols regression results for ui it is understood that 14 out of 30 ? rms (? coe? cients > 1) are successful in establishing their e? ciency in the paper industry in the matter of utilization of cas as a whole in generating sales. The chief executives of the paper industry properly recognized the role of e? cient use of wc in liquidity and pro? tability, but in practice they could not achieve it. Most of them followed the budgetary method in planning wc, and wcm was ine? ient due to sub-optimum utilization of wc (Prasad 2001). The level of wc is a function of sales (Sagan 1955). This statement has been tested in h2 . 0 h2 The paper Industry as a whole does not have the ability to utilise the 0 cas for generating sales. Managing Global Transitions Working Capital Management E? ciency and ebit table 3 69 Regression Results showing the Relationship between Cash Conversion Cycle and ebit of the Paper Industry Coe? cient –88. 3882 –2. 7995 27. 2530 2 2 Explanatory variables Intercept fixdfara findbtra lnsales ccc R 2 2 se of coe?. 8. 9779 90. 5067 14. 2790 1. 7090 0. 0201 value –9. 85 –2. 95 –0. 20 15. 95 –2. 07 P value 0. 0000 0. 0035 0. 8447 0. 0000 0. 0390 –266. 63492 –0. 04161 0. 4696 0. 4625 65. 312 4,295 1 Adjusted R F value Degrees of freedom notes Signi? cant at 5% level. 2 Signi? cant at 1% level. The h2 is rejected; numerically, the overall ui (> 1) indicates e? cient 0 wcm. The average value of ui, as a whole, shows that the ui is > 1 for 15 ?rms out of 30 ? rms. Thus, the utilization of wc for the industry as a whole was mostly e? cient during the period of study. From the results of ols regression for ei, it is evident that the > 1 for 12 out of 30 ? ms, i. e. , these 12 ? rms have achieved targeted industry norms in respect of adopting e? ciency in wcm policy. E? cient wcm is necessary for achieving both liquidity and pro? tability of a company. A poor and ine? cient wcm leads to tie up funds in idle assets and reduces the liquidity and pro? tability of a company (Reddy and Kameswari 2004). wc o? ers huge cash opportunities that could be released with sustainability within a relative short period of time (Loneux 2004). This has been tested in h3 . 0 h3 The paper Industry, as a whole, does not have e? ciency in wcm. The h3 is rejected as the ei (> 1) shows e? cient wcm. The average 0 value of ei shows that the ei is > 1 for 12 ? rms out of 30 ? rms under study for the study period. Relationship between WCM E? ciency and EBIT The relationship of Earnings before Interest and Taxes (ebit) of the paper industry with e? ciency of wcm is evaluated here. ebit is taken as the proxy and ccc, apdays, ardays, invdays are considered as measures of wcm e? ciency in the analysis. Apart from these variables, fixdfara, Volume 7 · Number 1 · Spring 2009 70 Azhagaiah Ramachandran and Muralidharan Janakiraman indbtra and size (natural log of sales) are considered as control variables in the regression model. First, correlation among all selected variables is worked out and ols regression is run, the results of the regression are presented in table 3. From the regression results, it is apparent that apdays has a signi? cant (–)ve association with ebit, which indicates that a more pro? table ? rm delays its payment to its suppliers. The other three wcm e? ciency measures, ccc with +ve in sign, ardays and invdays with (–)ve in sign have an insigni? cant one to one relationship with ebit in the paper industry.

The +ve relationship of ccc shows that more pro? table ? rms under paper industry failed to reduce the ccc. From the results of regression between ebit and ccc it can be inferred that ccc has a signi? cant (–)ve relationship with ebit. Also, all the three control variables are related signi? cantly with ebit. The relationships of fixdfra and findbtra are (–)ve and that of the lnsales is +ve with ebit. The results show that larger ? rms with less ? xed ? nancial assets and ? nancial debt ratio earned more ebit by decreasing the ccc remarkably under the paper industry.

The regression results between ebit and apdays show that apdays has a signi? cant +ve coe? cient with ebit. Further, among the control variables, the coe? cient of fixdfra is signi? cant at 1 per cent level and that of the findbtra is insigni? cant. On the other hand, size of ? rms is highly related to ebit with +ve in sign. From the results, it is well established that the larger ? rms under the paper industry with less ? xed ? nancial assets earned more ebit by delaying the payment to their suppliers. Regarding the relationship between ebit and ardays, the results of regression shown in table 5 reveal that the coe? ient of ardays is signi? cant +vely, and coe? cients of all the control variables are signi? cant but with a di? erent sign. While ? rm size is +vely related, fixdfra and findbtra are (–)vely related to ebit of the ? rms under the paper industry. In sum, it is found that the larger ? rms with less ? xed ? nancial assets and ? nancial debt have generated more pro? t (after operating cost) by increasing the credit period granted to their customers under the paper industry. With regard to the impact of number of days in inventory (inventory cycle) on the ebit of the ? ms under the paper industry, the regression results disclose that invdays has an insigni? cant (–)ve co-e? cient with ebit. On the other hand, the coe? cients of fixdfra with (–)ve in sign and that of lnsales with +ve in sign are signi? cant at 1 per cent level. Managing Global Transitions Working Capital Management E? ciency and ebit table 4 Regression Results showing the Relationship between Number of Days Accounts Payable and ebit of the Paper Industry Coe? cient –93. 8385 2 71 Explanatory variables Intercept fixdfara findbtra lnsales apdays R 2 2 se of coe?. 9. 316 89. 8865 14. 8742 1. 7380 0. 0210 t value –10. 28 –2. 89 –0. 61 15. 93 2. 43 P value 0. 0000 0. 0042 0. 5425 0. 0000 0. 0159 –259. 60952 –9. 0700 27. 6829 2 0. 05091 0. 4724 0. 4653 66. 052 4,295 1 Adjusted R F value Degrees of freedom notes table 5 Signi? cant at 5% level. 2 Signi? cant at 1% level. Regression Results showing the Relationship between Number of Days in Accounts Receivables and ebit of Paper Industry Coe? cient –99. 7462 –7. 3206 27. 4998 2 2 Explanatory variables Intercept fixdfara findbtra lnsales ardays R 2 2 se of coe?. 9. 9563 89. 8986 14. 6625 1. 180 0. 0709 t value –10. 02 –2. 59 –0. 50 16. 01 2. 38 P value 0. 0000 0. 0101 0. 6180 0. 0000 0. 0180 –232. 82142 0. 16861 0. 4720 0. 4649 65. 942 4,295 1 Adjusted R F value Degrees of freedom notes Signi? cant at 5% level. 2 Signi? cant at 1% level. However, the findbtra has an insigni? cant +ve coe? cient with ebit. Overall, the regression results exposed the fact that the larger ? rms under paper industry, which earn more ebit, have fewer inventories, but decrease in inventory level does not in? uence the increase in ebit signi? cantly. At the same time these ? ms have gained more ebit with less ? xed ? nancial assets and by increasing the ? nancial debt insigni? cantly. There is a strong (–)ve relationship between variables of the wcm and pro? tability of the ? rm (Reheman 2007). This means that as the ccc increases it will lead to a decrease in the pro? tability of the ? rm, and Volume 7 · Number 1 · Spring 2009 72 Azhagaiah Ramachandran and Muralidharan Janakiraman Regression Results showing the Relationship between Number of Days in Inventory and ebit of the Paper Industry Coe? cient –86. 2624 5. 6502 26. 4734 2 2 able 6 Explanatory variables Intercept fixdfara findbtra lnsales invdays R 2 2 se of coe?. 9. 3964 90. 7656 14. 0239 1. 6602 0. 0537 t value –9. 18 –2. 81 0. 40 15. 95 –1. 16 P value 0. 0000 0. 0053 0. 6873 0. 0000 0. 2474 –255. 25212 –0. 0622 0. 4644 0. 4571 63. 942 4,295 Adjusted R F value Degrees of freedom notes 2 Signi? cant at 1% level. managers can create a +ve value for the shareholders by reducing the ccc to a possible minimum level. This has been tested in h4 . 0 h4 There is no signi? cant relationship between wcm e? ciency and ebit 0 of the paper industry.

The h4 is rejected as apdays (F value 66. 05), ccc (F value 65. 31), and 0 ardays (F value 65. 94) and Number of Days in Inventory (F value 63. 94) are signi? cantly related to ebit of the paper industry. Therefore, it is inferred that there is a signi? cant relationship between wcm e? ciency and ebit of ? rms in the paper industry in India. Conclusion The importance of e? cient wcm is indisputable. Moreover, adequate wcm is essential as it has a direct impact on ebit and liquidity. An attempt has been made in the present study to investigate the relationship between wcm e? iency and ebit of Indian paper companies. In the matter of wcm, three indexes and net ebit have been computed for all the ? rms over the period of study – ten-years. From the study it is concluded that the Indian paper ? rms perform remarkably well during the period. Industry overall e? ciency index was > 1 in 3 out of 9 years for the study period. Though some of the sample units had successfully improved e? ciency during these years, the existence of a very high degree of inconsistency in this matter clearly points out the need for adopting sound wcm policy in these ? rms.

Managing Global Transitions Working Capital Management E? ciency and ebit 73 There is found to be a (–)ve relationship between ebit and the cash conversion cycle (ccc) which was used as a parameter, therefore it seems that operational ebit dictates how to manage the wc of the ? rm. Further, it is found that lower gross ebit is associated with an increase in the apdays. This could lead to the conclusion that less pro? table ? rms wait longer to pay their bills, taking advantage of credit period granted by their suppliers. The +ve relationship between ardays and ? rms ebit suggests that less pro? able ? rms will pursue a decrease of their ardays in an attempt to reduce their cash gap in the ccc. References Raheman, A. , and M. Nasr. 2007. Working capital management and profitability: Case of Pakistani ? rms. International Review of Business Research 3 (2): 275–96. Agarwal, N. K. 1977. Management of working capital. phd diss. , Delhi School of Economics. Bhattacharya, H. 1997. Towards Comprehensive theory of working capital: A techno ? nancial approach. Economic and Political Weekly, August 29. Deloof, M. 2003. Does working capital management a? ect pro? tability of ? rms.

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