Authors: Sudeep Vasant Gowli, Dr.Suma
Abstract: Working capital management plays a critical role in determining the operational efficiency and profitability of manufacturing firms, particularly in capital-intensive industries such as ceramics. This study examines the influence of working capital components on the profitability of Murudeshwar Ceramics Ltd., a leading ceramic tile manufacturing company in India. The research focuses on key components of working capital, namely inventory management, receivables management, cash management, liquidity management, and the cash conversion cycle, and evaluates their impact on financial performance during the period 2019–2024. The study adopts a descriptive and analytical research design using both primary and secondary data sources. Primary data were collected through a structured questionnaire administered to 100 respondents associated with financial and operational activities of the company. Secondary data were obtained from annual reports, financial statements, industry publications, and corporate disclosures. Statistical tools such as descriptive statistics, correlation analysis, regression analysis, t-test, and ANOVA were used to analyze the relationship between working capital components and profitability indicators. The findings reveal that effective working capital management significantly improves profitability and operational efficiency. Inventory management and liquidity management exhibit a positive association with profitability, while delays in receivables collection adversely affect cash flow and financial performance. Correlation analysis indicates a moderate positive relationship between working capital efficiency and profitability, whereas regression analysis confirms that inventory, debtors, and cash management collectively influence profit levels. The study further identifies that strong liquidity management and effective credit control policies support financial stability and short-term solvency. The study contributes to the growing literature on working capital management in Indian manufacturing firms by providing firm-specific evidence from the ceramics sector. The findings offer important managerial implications for improving financial planning, reducing working capital stress, and enhancing operational efficiency. The research recommends strengthening receivables management, optimizing inventory levels, and adopting advanced working capital monitoring systems to sustain long-term profitability and competitiveness.
