An Empirical Analysis of Financial Performance Using Working Capital Indicators: Evidence from Jayanthi Textiles PVT LTD
Ms. S. Srinidhi1, Dr .M. Sathya2
1Student, 2Professor, School of Management Studies, Karpagam College of Engineering, Coimbatore, Tamil Nadu.
DOI: 10.55041/IJSREM59211
ABSTRACT
Working Capital Management is one area which plays a most significant role in the proper functioning and financial stability of an organization. However, there are many problems which are being faced by the organizations, like improper planning for the cash flow, inventory holding costs, delays in the collection of debts, and improper management of payables. The scope of the study is confined to effective utilisation of working capital management in Jayanthi Textiles, Coimbatore. The study analyses the 5 years financial statement such as Income statement and Balance sheet of the company. The sample period of the study is 2020-2021 to 2024-2025. Analytical research design and purposive sampling technique has been used. Secondary data was used. Financial statements of the company have been used as secondary data. Ratio analysis, comparative and common size balance sheet analysis tools have been applied as statistical tool to reach the findings of the study. The conclusive finding is that working capital management effectiveness has a high influence on the financial stability and operational effectiveness. The evaluation shows that the changes in the liquidity ratio, profitability ratio, and efficiency ratios are indicators of discrepancies in the management of current assets and liabilities. The decreasing tendencies of some of the ratios like working capital ratio, inventory turnover, and profitability indicators indicate that the financial planning and control should be improved. Meanwhile, the increase in solvency and returns on investment is a sign that there can be further growth provided resources are used effectively. It is also concluded that a good balance between liquidity and profitability is also necessary so that long term sustenance is achieved.
Keywords: Working Capital Management, Financial Performance, Predictive Analytics, Liquidity, Profitability, Financial Flexibility.
