DETERMINANTS OF WORKING CAPITAL MANAGEMENT: EVIDENCE FROM FOOD & BEVERAGES COMPANIES – NESTLE INDIA

Abstract

The aim of present study examines the determinants of working capital management and its impact on firms’ net worth of food and beverage company (Nestle India) for ten years. The study based on secondary source and data has been obtained from Capitaline Database for the period from financial year 2009-2010 to 2018-2019. The data has been considered in this study is authenticated and available on the Capitaline Database website. The determinants of working capital evaluated on return on net worth by computing Karl Pearson’s Correlation Coefficient, Correlation Analysis and Multiple Regression Analysis. The result of correlation analysis found negative impact of inventory turnover ratio (ITR), debtors’ turnover ratio (DTR) and positive impact of interest coverage ratio (ICR), debt equity ratio (DER), fixed asset turnover (FATR) and current ratio (CR) on return on net worth (RONW). While, the result of multiple regression analysis revealed negative impact of only CR and positive impact of inventory turnover ratio (ITR), debtors’ turnover ratio (DTR), interest coverage ratio (ICR), debt equity ratio (DER), fixed asset turnover (FATR) on return on net worth (RONW).