Abstract:
Financial Management basically deals with raising of financial resources and its proper allocation in order
to maximize shareholders wealth. For a successful running of an organization fixed and current assets play a
crucial role as organization generally invests in these options. A firm’s working capital consists of its
investments in short-term assets like cash and bank balance, inventories, receivable and short term
investments. Therefore, the working capital management mainly refers to the management of all these
individual current assets. In this research paper an attempt has been made to study the components of
working capital and the possible implications of working capital management policies on profitability of
ONGC Limited. The paper also attempts to analyze the correlation between liquidity, profitability and return
on investments of ONGC. The study is based on secondary data collected from annual reports of ONGC for
the period 2000 to 2012. In this paper there is an application of correlation and regression analysis to
identify the significant impact of Working capital management on the profitability. Working capital
Management is essential as it might have a direct impact on profitability and liquidity.