Efficiency and Profitability: An Analysis of Working Capital and Asset Management Strategies in Indian Railway Companies

Abstract

he study discusses the rapid modernization and expansion of the Indian railway network to meet growing mobility demands, backed by significant government investments and strategic initiatives. It highlights the importance of efficient working capital management in ensuring smooth operations and optimizing liquidity for businesses across industries, emphasizing the need to strike a balance between current assets and liabilities to maximize profitability and minimize risk. The prime objective of the study is to assess and analyse the impact of Working Capital Policies on Earnings in the selected listed Indian Railway companies of India. The study collects data from top companies across diverse railway- related sectors, selecting one company from each of the six sectors. The dataset covers five years from 2018-19 to 2022-23, facilitating a thorough longitudinal analysis of trends and patterns. The independent variables comprise of Current Ratio, Quick Ratio, Debtors Turnover Ratio, Investments Turnover Ratio and Asset Turnover Ratio while Return on Asset is a dependent variable. It shows that there is a significant relationship between Working Capital Policies as well as Asset Management Policies and Return on Assets in the selected listed Indian Railway companies of India. The study shows certain theoretical, societal and practical implications.