STUDY THE RELATION BETWEEN WORKING CAPITAL SYSTEM AND PROFITABILITY IN AUTO MANUFACTURING INDUSTRY IN INDIA

The new economic policy adopted in India in 1991 known as Liberalization, Privatization and Globalization (LPG model). This policy has been designed to make the Indian economy progressively market oriented and integrate it with the emerging global economy structure. Therefore, in line with this policy it was very indispensable to analyze the working management and some financial ratios in some selected Auto manufacturing companies. The purpose of the study was to analyze the practice of working capital Management and Asset and liquidity ratios in six selected Indian auto manufacturing companies. For this aforementioned study, a time series data for the years 2003- 2012 has been employed and a secondary data from the annual reports of the six companies was solicited. Both qualitative and quantitative paradigms were employed so as to analyze the research. Regarding the relation between working capital and liquidity analysis, Index of current assets, quick assets and debt equity assets ratios were used. The minimum current ratio chain index among all selected companies was founded in Ashok Leyland that was 50.29 in 2011-2012. The maximum current ratio chain index among all selected companies was founded in Hero MotoCorp that was 145.00 in 2009 -2010. With reference to the above listed companies the minimum quick ratio chain index was founded in Ashok Leyland that was 39.34 in 2011-2012 and the maximum quick ratio chain index was founded in Hero MotoCorp that was 231.04 in 2009 -2010. With reference to the above listed companies the minimum debt equity ratio chain index was founded in Maruti Suzuki that was 6.67 in 2005-2006 and the maximum debt equity ratio chain index was founded in TVS Motor that was 400.00 in 2009-2010.

Profitability, liquidity, Working capital, Auto manufacturing companies.