Impact of Working Capital Management on Efficiency, Liquidity and Profitability of Lupin Limited: A Case Study

By : Prerna Jain , Anurodh Godha

Page No: 219-226

Abstract
As the saying goes, ‘If you make it in short term long enough, you don’t need to work about the long term.’ Management of working capital has close implications with the two important factors that judge the overall success of the business—profitability and solvency. Keeping in view the significance of working capital management as a gray area of corporate finance function, an attempt has been made to examine the working capital trends and its impact on efficiency, liquidity and profitability of Lupin Limited—an innovation-led transnational pharmaceutical company producing a wide range of quality, affordable generic and branded formulations and APIs. The study is based on secondary data collected and compiled from annual reports. The period of study is five years and various statistical methods like standard deviation, coefficient of variation and ratio analysis as tools of financial statement analysis have been adopted. The study reveals that the firm’s position is sound from the point of view of liquidity, solvency and profitability. However, its activity ratios do not represent a satisfactory position. More information can be obtained by management in this area and further probing can be done before taking any corrective action.

Authors :
Prerna Jain : Lecturer, Department of ABST, Government College, Ajmer, Rajasthan, India.
Anurodh Godha : Assistant Professor, School of Commerce and Management, Vardhaman Mahaveer Open University, Kota, Rajasthan, India.