Working Capital Strategy and Working Capital Management: Impact on Profitability

Main Article Content

Ankit Nijhawan


This study aims to check the consequences of the Working Capital Management (WCM) and the Working Capital Strategy (WCS) on the results of organizations over the various phases of the Corporate Life Cycle (CLC). Overall, there is a negative corelation between WCM and such results. However, it is not consistent throughout the various phases of the life cycle of an organization. For instance, such negative correlation is more likely to be prominent at the start-up stage of an organisation, while it rarely has any major effect on the output of mature firms. Likewise, WCS also has a variety of distinct impacts on financial results around the CLC. Secondary approach was carried out to pursue the study and theoretical review was carried out.

However, the life-cycle stage is rarely taken into consideration while formulating the WCM approach by the management of most organizations. This might significantly threaten their financial sustainability. These indicate that companies need tailored WCM and WCS to achieve sustainable financial efficiency during the various stages of the organisations life cycle. The decision makers should likewise not disregard the fundamental situation of the CLC stages in their planning to guarantee success.

Article Details