MBA Marketing - Impact of Marketing on Auto-Ancillary
MBA Marketing - Impact of Marketing on Auto-Ancillary
Abstract
It is necessary to establish a relationship between the MSMEs' working capital and their profitability, market capitalization, and added economic value. To analyze the influence of independent variables on dependent variables, quantitative data was collected from the annual reports of a company. An analysis of MSMEs revealed that working capital has a direct impact on profitability and market capitalization in these companies. If working capital increases or decreases, both terms will be affected. Economic value added, on the other hand, is not affected by the working capital. However, working capital has no relationship with economic value added, the paper concludes.
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Introduction
Small businesses play a crucial role in the growth of the United States of America. Indian Youth are encouraged to come up with innovative ideas so that India can beat other developed countries. Around 800+ start-ups are launched each year, and nearly half of them fail. Because most of their assets are in the form of current assets, their idea, management skills, and most importantly, working capital management, can all be factors.
There are many firms whose current assets are less than half of their flaskets, and the number is even higher in the distribution sector (Horneand Wachowicz, 2009). Well-designed assets management policies are expected to contribute substantially to the firm's value (Padachi, 2010). Current growth rates in the auto industry are 18 percent. It contributes around 2.3 percent to India's GDP. As of 2016-17, India's automotive exports totaled Rs 73,123 Crores, an increase of nearly Rs 2300 Crores over the previous year. Growth in the domestic market and increasing globalization can be deduced from this information.
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Conclusion
Working capital has a significant impact on the profitability and market capitalization of MSMEs in the auto-ancillary sector listed on the BSE. It has a greater impact on market capitalization than profitability. In other words, working capital has no influence on EVA.
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