A Study on Effect of Working Capital Management on The Firm Profitability Wealth Tree Group, Hyderabad

Abstract

This study examines the effect of Working Capital Management on the profitability of Wealth Tree Group. Working capital management plays a significant role in maintaining the liquidity, operational efficiency, and financial stability of an organization. Efficient management of current assets and current liabilities directly influences the profitability and overall performance of a firm. The study aims to analyze how the management of cash, inventory, receivables, and payables impacts the profitability position of the company. The research is based on secondary data collected from the annual reports, financial statements, company records, journals, and websites related to the organization for a selected period of study. Financial tools such as ratio analysis, trend analysis, and comparative analysis are used to evaluate the working capital position and profitability performance of the company. Ratios including Current Ratio, Quick Ratio, Inventory Turnover Ratio, Debtors Turnover Ratio, Working Capital Turnover Ratio, and Net Profit Ratio are analyzed to understand the relationship between working capital efficiency and profitability. The findings of the study reveal that effective working capital management contributes positively to the profitability and operational performance of the company. Proper utilization of short-term resources helps the organization maintain adequate liquidity while maximizing returns. The study concludes that maintaining an optimal balance between current assets and current liabilities is essential for improving financial performance and achieving long-term business sustainability.