Analysis of Working Capital Efficiency in Amrep (Amalgamation Repco) Limited, Madhavaram, Chennai, Tamilnadu (A Financial Perspective)

Abstract

This study examines the working capital management efficiency of AMREP Limited over a six-year period from 2020 to 2025. The primary objective is to measure the working capital efficiency through the analysis of various liquidity and working capital ratios. For this study, secondary data collected from the company's audited annual reports. Key financial indicators such as working capital, current ratio, quick ratio, cash ratio, working capital turnover ratio, inventory turnover ratio, debtors’ turnover ratio, creditors’ turnover ratio, inventory holding period, receivables collection period, payables payment period, and cash conversion cycle were calculated and analyzed. The findings reveal that the company maintained positive working capital throughout the study period, indicating sound short-term financial stability. Significant improvements were observed in inventory management, receivables collection efficiency, working capital utilization, and cash conversion cycle performance. The inventory turnover ratio and debtors’ turnover ratio increased steadily, while inventory holding and receivables collection periods declined, reflecting enhanced operational efficiency. The cash conversion cycle also improved, indicating effective management of cash flows and working capital resources. Overall, the study concludes that AMREP Limited has demonstrated effective working capital management practices that contributed to improved operational performance and financial efficiency. Further improvements in liquidity management and cash planning are recommended to ensure operational efficiency, long-term financial sustainability and profitability.