OPERATIONAL ADEQUACY OF WORKING CAPITAL MANAGEMENT OF SELECTED INDIAN AUTOMOBILE INDUSTRY - A BIVARIATE DISCRIMINANT ANALYSIS
Journal Title: International Journal of Research in Social Sciences - Year 2012, Vol 2, Issue 1
Abstract
The study in general aims at making a study of the management performance relating to working capital in the selected units of the automobile industry in India. It covers seventeen major units in the automobile industry (five in commercial vehicles sector, three in passenger cars and multiutility vehicles sector and nine in two and three wheelers sector). For the purpose of the study, necessary data on working capital and other related variables were collected for the period 1992-93 to 2006-07. The financial statements used were mainly the Profit and Loss accounts and Balance Sheets published in the annual reports of the respective units. The study used a variety of financial ratios to accomplish the objectives. It employed discriminant analysis to examine adequacy of working capital. The operational adequacy of the working capital of the selected units has also been assessed by employing the discriminant analysis based on the size of working capital in terms of monthly operational requirements and sales requirements as independent variables. The construction of discriminate function suggests that the size of net working capital in terms of monthly operational requirements appeared to be stronger than sales requirements in all the years. The discriminate Z values were estimated and the good risk and poor risk enterprises may also be identified by computing the cut-off values. The comparison of good and poor risk units as per the current ratio and as per the discriminant score shows that the misclassification of units is noticed in all the years. It can be concluded that in the years 1992-93 to 2006-07 Ashok Leyland Ltd in commercial vehicles sector, Mahindra and Mahindra Ltd in passenger cars and multiutility vehicles sector and Bajaj Auto Ltd in two and three wheelers sector units maintained adequate size of the working capital throughout the period under study.
Authors and Affiliations
Dr. N. Pasupathi
An Integrated Approach to Rural Digital ServicesCase Study on Common Service Centres in Hundred Thousand Villages of India
Efficient, effective and un-hindered, symmetric access to Governmental information is a fundamental goal of India‟s National E-governance Project (NeGP). The plans for this project recognize that citizens‟ Information...
Causality between Saving and Economic growth in India
The objective of this paper is to examine Co-integration and the direction of causality between savings and growth as these have important implications for development policy. We estimate long run interrelationships be...
PRODUCTION AND MARKETED SURPLUS OF COTTON: A CASE STUDY OF BATHINDA DISTRICT OF PUNJAB
Cotton often referred as “White Gold” has been in cultivation in India for more than five thousand years. India occupies the 2nd place among the cotton growing countries of the world. The increased industrialization an...
EDUCATION MANAGEMENT FOR ADVANCING RURAL INDIA
The paper reviews the state of education management for Advancing Rural India. Using the setting up of some specialized Institutes of Rural Management Education as a pivot, the paper examines the difficulties in establ...
Status of Higher Education in Rural Colleges of District Ludhiana
Higher Education is a very important sector for the growth and development of human resource which can take responsibility for social, economic and scientific development of the country. Indian higher education system...