Impact of Working Capital Performance on Profitability of Dairy Industry in Andhra Pradesh

By : P. Sarveswara Rao, N. Madhava Rao

Page No: 80-99

Abstract
Dairy industry is an important component of Indian economy; it is supplementary to the agricultural sector providing additional income to the farmers. Working capital is the lifeblood of any firm. Keeping in view of this fact, working capital analysis is made for seven units across the undivided Andhra Pradesh state for seven years from 2005–06 to 2011–12. Working capital is estimated for all the sample units using regression technique. The average working capital turnover ratio is more than ‘8’ times in the case of Sangam, Heritage, Krishna, Tirumala, Nandi and Mulukanoor dairy units and confirms their excellent performance. In the case of Vijaya Dairy, the average working capital turnover ratio is less than ‘5’, which indicates poor performance. To study the intensity of the linear relationship between the working capital ratios and profitability, coefficient of correlation has been computed.

Authors :
P. Sarveswara Rao : Assistant Professor of Commerce, SR&BGNR Govt. Arts & Science College, Khammam, Telangana, India.
N. Madhava Rao : Assistant Professor of Commerce, SR&BGNR Govt. Arts & Science College, Khammam, Telangana, India.