Abstract

The present research investigates the effect of working capital management on the liquidity and profitability of Power Grid Corporation of India Ltd. during 2008-2022. The study utilized secondary data derived from the company's annual reports and financial statements. The effectiveness of the management of current assets and current liabilities was measured using several liquidity and working capital ratios. In this study, multiple regression analysis was used to investigate the effect of working capital management on profitability proxied by ROA. This finding indicates that liquidity management positively affects profitability. The regression model explains nearly 85% of the variance in ROA. This means the model is fitting well. The two exceptions are Net Working Capital (NWC) and Current Ratio (CR), which are statistically significant indicators of profitability. The results indicate that for the organization's financial stability, effective functioning, and continuous development, it is important to achieve the optimal combination of liquidity and profitability.