A study on working capital management of selected pharmaceutical companies in India

The management of Working Capital draws close attention of finance managers as it involves frequent and dynamic decision-making to determine the size of current assets required for uninterrupted flow of activities of a business. The main aim of this paper to construct an overall performance Index and to measure the degree of efficient utilisation of short term resources by the pharmaceutical companies. As the data selected for the study consists of observations in a time series manner so, analytical method is used in this study. Ten companies were selection during the study period is confined only 10 years from 2003–2004 to 2012–2013. The financial and statistical tools used for the study were Ratio Analysis, Descriptive Statistics and Indices. In this study four variables are used utilization index, operating profit index, performance index, efficiency index and regression. The result inferred that there is a positive relationship between operating profit index and utilisation indices can be explained by independent variables. The hypothesis is accepted which state that there is significant relationship between operating profit index and utilisation indices.