Working Capital Dynamics and Corporate Profitability

This research examined how WCM influences the profitability of leading firms. The study covers 4 sectors of BSE-listed companies over 2013-14 to 2022-23. Its objectives were to analyse trends in WCM and profit, test differences in WCM and profitability across firms, assess correlations between WCM ratios and profit measures, and model profitability via regression on WCM variables.The methodology was descriptive and analytical, using secondary financial data and statistical tools. Key findings show significant variation in WCM practices. ANOVA revealed statistically significant differences in liquidity and turnover ratios across firms. Correlation analysis found that higher liquidity ratios and longer operating cycles generally accompany higher profitability, whereas a longer cash conversion cycle is linked to lower profit. Regression models confirmed WCM's strong impact and mixed significance.The research concludes that efficient WCM is critical to boosting corporate profitability. Firms need industry‐tailored strategies to balance liquidity and profit, enhancing both short-term earnings and long-term stability.