Impact of Working Capital Management on Profitability of Manufacturing Firms

ACC3005 The Accounting
Research Project

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Background.................................................................................................................................3
Aim and objective.......................................................................................................................3
Rationale.....................................................................................................................................4
LITERATURE REVIEW................................................................................................................4
RESEARCH METHODOLOGY.....................................................................................................5
TIMELINE.......................................................................................................................................6
REFERENCES................................................................................................................................8

Topic- To analyse the impact of working capital management on profitability of manufacturing
firms.
INTRODUCTION
Background
Working capital is being defined as the level of liquidity which company need to
maintain in order to meet its day- to- day expenses of the company. this is a financial metric
outlining the liquidity of company which need to be maintained for its effective operations. The
working capital management is being referred to as efforts of company in direction of managing
the current asset and current liabilities of business for smooth working. For the success of the
business it is very essential that working capital is managed in proper manner so that company is
in position to meet its daily expenses. The present study is based on several companies belonging
to manufacturing industry and are also listed on ASX that is Australian Securities Exchange. The
present research will undertake the use of financial statements analysis of these companies to
evaluate the impact of working capital over profitability of the companies.
Aim and objective
Aim- To critically evaluate the impact working capital management has over profitability of
company. A study on ASX listed manufacturing companies.
Objectives
 To articulate understanding relating to working capital management and its significance.
 To implement use of financial statements to outline the effective use of working capital
management for increasing profitability of ASX listed companies.
 To examine the challenges which companies face at time of managing working capital in
proper and effective manner.
 To recommend some of the strategies to overcome the challenges being faced by ASX
listed company.
Research question
1. What is the concept of working capital management along with its significance?
2. How the financial statements are being used to analyse whether working capital is
managed properly and what impact it has on profitability?