Working Capital Efficiency and Profitability Analysis of Small Scale Industries in Jammu & Kashmir

Authors: Rahil Gujral, Jatin Yadav

DOI: https://doi.org/10.37082/IJIRMPS.v13.i6.233199

Short DOI: https://doi.org/hcgkpx

Country: India

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Abstract: Working capital efficiency is a crucial determinant of profitability and financial sustainability in small-scale industries. The present study analyzes working capital efficiency and its impact on profitability of small-scale industries in Jammu & Kashmir. Primary data were collected from industrial owners and managers through structured questionnaires, while secondary data were obtained from financial statements and industrial reports. Statistical tools such as percentage analysis, correlation, regression, ANOVA, and financial ratio analysis were used for data interpretation. The findings reveal that efficient cash management, inventory turnover, and receivables management significantly improve profitability and operational performance of industrial units. The study further identifies major financial challenges such as delayed receivables, liquidity shortages, rising operational costs, and limited access to institutional finance. Statistical analysis confirmed a strong positive relationship between working capital efficiency and profitability indicators. The study emphasizes the importance of scientific financial planning and efficient working capital utilization for improving industrial growth and financial sustainability.

Keywords: Working Capital Efficiency, Profitability Analysis, Small Scale Industries, MSMEs, Liquidity Management, Financial Performance, Inventory Turnover, Cash Management

Paper Id: 233199

Published On: 2025-11-15

Published In: Volume 13, Issue 6, November-December 2025

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