Impact of Working Capital Management on Profitability – A Case Study of ACC Ltd

This study empirically examines the relationship between working capital management and profitability of ACC Cement Company, the leading cement manufacturer of the country for assessing the impact of working capital management on profitability during the period 1999-2000 to 2009-10. The impact of working capital management on profitability is analyzed by computing Pearson's simple correlation coefficients, multiple correlation analysis and multiple regression analysis between Operating Profit and the selected independent variables affecting the working capital. The 't' test has been used to judge whether the computed correlation and regression coefficients are significant or not. Few variables show a strong and positive correlation with the profit whereas some others do not have. Hence, the result concludes that there is a moderate relationship between working capital management and firm's profitability. It can be said that there exists a relationship between the efficiency of working capital and the profitability, but the relationship is not statistically significant