An Empirical Study of Relationship between Working Capital Management and Leverage in Selected Petroleum Companies in India

  • Yousif Hameed Nayyef Salah El-Deen Education Directorate, Ministry of Education, Iraq
Keywords: Liberalisation, Privatisation, Globalisation, Working Capital Management, Leverage


The main purpose of this article is to find out the relationship between working capital management and leverage of selected petroleum companies in India. The management of working capital and leverage in the business organization has been considered as very crucial part in financial management. Working capital considered as surplus of current assets over current liabilities and leverage considered as firm’s ability of employing long term fund having a fixed cost for the purpose of increasing the return of the real owner of the organization. The evaluation of relationship between the two variables and it is identified with the help of parametric test like correlation analysis and one-way ANOVA.  The major findings of the study indicated that there is mixed relationship between working capital and leverage position because with the help of correlation analysis Reliance Petroleum, ONGC (Oil and Nature Gas Corporation Limited), IOCL (Indian Oil Corporation Limited), BPCL (Bharat Petroleum Corporation Limited) indicated positive relationship between two variables. GAIL (Gas Authority of India Limited) indicated negative relationship between working capital and leverage during the study period.


Ajmera, T. (2019). Working Capital Management and its impact on profitablity in tyre industry: A study of selected Companies. Journal of Advanced Research in Economic and Administrative Sciences, 40-46.

Ama Hingurala Arachchi, W. P. (2017). The Impact of Working Capital Management on firm value: evidence from a frontier market. Asina Journal of Finance and Accounting, 1-15.

Baskar, R. (2019). Liquidity Management of Selected Tyre Companies in India - An Analysis. The International Journal of Analysis and Experiment modal Analysis, 488 - 500.

Daniel Mogka Makori, A. J. (2013). Working Capital Management and Firm Profitability: Empirical Evidence from Manufacturing and Construction Firms Listed on Nairobi Securities Exchange, Kenya. Internatinoal Journal of Accounting and Taxation, 1-14.

Dineshbhai, H. H. (2022). Impact of Interest Rates Changes on Banking Profitability Sector in India: An Empirical Research on the Profitability Performance of Selected Nationalized Banks in India. Journal of Social Commerce, 2(1), 1-10.

Division, E. a. (2015-16). Indian Petroleum Natural Gas Statistics. Ministry of Petroleum and Natural Gas Economic and Statistics Division.

IBEF. (2021, July). Oil and Gas Industry In India. Retrieved September 14th Sepetember, 2021, from

Ilhan Dalci, H. O. (2018). Working Capital Management policy in Health Care: The effect of Leverage. Elsevier, 1-19.

Jayarathne, T. (2014). Impact of working capital management on profitablity: evidence from listed companies in sri lanka. International Conference on Management and Economics, (pp. 1-6). University of Ruhana, Sri Lanka.

Kamal Naser, R. N.-H. (2013). Factors influencing corporate working capital management: evidence from an emerging economy. Journal of Contemporary Issues in Business Research, 11-30.

M.A. Zariyawati, M. A. (2009). Working Captial management and corporate performance. journal of modern accounting and auditing, 47-56.

Michael J. Gombola, A. Y.-F.-C. (2016). The effect of leverage and liquidity on earnings and capital management: evidence from U.S. commercial banks. Internatioanl Reveiw of Economic and Finance, 35-58.

Oladipupo, A. a. (2013). Relative Contribution of Working captial management to corproate profitability and dividend payout ratio: evidence from nigeria. Interenational journal of business and finance management research, 11-21.

Rizqi, A. F. (2018). The efffect of working capital, leverage and firm size towards corporate performance with liquidity ss moderating variables. Indonesian Journal of Business, Accounting and Management, 1-12.

SEN, M. (2010). Relationship between efficency level of working capital management and return on total assets in Ise. International Journal of Business and Management, 109-115.

Shah, V. a. (2007). Impact of Working Capital Management policies on corporate performance -An Empirical Study. Global Business Review, 267-281.

Tiwary, S. (2021, 09 14). Production Linked Incentives Schemes in India. Retrieved September 14, 2021, from

Zariyawati. (2009). Working Capital Management and Corporate performance. Journal of Modern Accounting and Auditing, 47-56.

How to Cite
Nayyef, Y. H. (2023). An Empirical Study of Relationship between Working Capital Management and Leverage in Selected Petroleum Companies in India. Journal La Bisecoman, 3(4), 158-166.