Impact of profitability on woring capital management of selected pharmaceutical companies in India

Under this study is panel test the impact of working capital management on profitability. To investigate this relationship between these two, the author collected secondary data from selected pharmaceutical companies in India registered in securities exchange broad India for the periods from 2002–2004 to 2012–2013. For this purpose, in this study use dependent variable of return on assets to measure the profitability of company and independent variable of working capital turnover ratio, current assets to total assets ratio, current liabilities to total assets ratio, current ratio, debt-equity ratio, cash to current liability ratio, leverage and size of the companies as working capital management criteria. The results of the research show that there is a significant impact of the profitability on working capital management of the company. So, the result indicates that through proper working capital management the company can increase its profitability. This study will benefit the selected pharmaceutical companies in India in the management of their working capital in such an efficient and effcetive manner so that they can improve their profitability.