IGNOU MMPP-01 Project – Assessing Working Capital Impact on Liquidity, Efficiency, and Profitability in Indian FMCG Sector

Description

The Indian Fast-Moving Consumer Goods (FMCG) sector plays a pivotal role in the country’s economy. This project aims to assess how working capital management influences liquidity, operational efficiency, and profitability within this dynamic industry. Understanding these relationships is crucial for businesses seeking sustainable growth in a competitive landscape.

Objectives:

1. To analyze the relationship between working capital and liquidity in Indian FMCG companies.
2. To evaluate how working capital affects operational efficiency and its correlation with profitability.
3. To provide recommendations for effective working capital management strategies tailored to the FMCG sector.
4. Methodology: This study employs quantitative methods, analyzing financial data from leading FMCG companies in India over the past five years. Key financial ratios will be examined to assess liquidity (current ratio, quick ratio), efficiency (inventory turnover, receivables turnover), and profitability (net profit margin, return on equity).Findings: Preliminary findings indicate a significant relationship between efficient working capital management and improved liquidity and profitability in the FMCG sector. Companies with robust working capital practices exhibit higher operational efficiency, contributing to their overall success.Conclusion: The insights from this project will serve as a valuable resource for business leaders and financial managers in the FMCG industry, highlighting the importance of effective working capital management in driving financial performance.