ABSTRACT

This paper is aimed at analyzing the relationship between Working Capital

Management Efficiency (WCME) and Earnings before Interest & Taxes (EBIT) of
the Textile Industry in India during 20072016. To measure the WCME three index
values viz., Performance Index (PI), Utilization Index (UI), and Efficiency Index
(EI) are computed, and are associated with explanatory variables, viz., Cash
Conversion Cycle (CCC), Accounts Payable Days (APdays), Accounts Receivables
Days (ARdays), Inventory Days (INVdays). Further, Fixed Financial Assets Ratio
(fixdfara), Financial Debt Ratio (findbtra) and Size (Natural log of Sales) are
considered as control variables in the analysis, and are associated with the EBIT.
The study reveals that the Textile Industry has managed the WC satisfactorily. The
APdays has a significant () ve relationship with EBIT, which indicates that by
deploying payment to suppliers they improve the EBIT. The Textile Industry in
India performs remarkably well during the period, however, less profitable firms
wait longer to pay their bills, and pursue a decrease in CCC.
This study also tests the pace of accomplishing the target level of efficiency by an
individual firm during the period of study. Finding of study this study will reflect
the overall performance of textile sector.
INTRODUCTION
Textile is one of Indias oldest industries and has a formidable presence in the
national economy inasmuch as it contributes to about 14 per cent of manufacturing
value-addition, accounts for around one-third of our gross export earnings and
provides gainful employment to millions of people. They include cotton and jute
growers, artisans and weavers who are engaged in the organised as well as
decentralised and household sectors spread across the entire country. The industry
is largely foot-loose and has a wide sectoral dispersal particularly in handloom and
powerloom sectors. It has a wide spectrum of fibres consisting of cotton, jute, silk,
wool, man-made and synthetic fibres as well as blends of one or more fibres. It
enjoys possibly the widest linkages, both forward and backward, and contributes
directly not only to the livelihood but also to the empowerment of largely the
weaker sections of the society living in rural and semi-urban areas.

The growth of the industry over the years has been characterised by expansion in
dimension, changes in fibre-mix, adoption of heterogeneous technology matrix and
increase in availability of goods for home consumption and exports. In the
spinning segment, the spindleage increased from about 21 million in 1981 to about
34 million in March99 which is the second largest in the world after China. The
production of spun yarn has also increased accordingly from about 1240 million
kgs. in 1981-82 to about 2800 million kgs. in 1998-99. The production of fabrics
has also increased from 12300 million sq. meters in 1981-82 to 36200 sq. million
meters in 1998-99. The rapid growth in the decentralised garment segment in the
past decade or so has added to the dimension of the textile industry. The garment
segment began initially as an export-oriented effort but it has grown in volume and
diversity and the export of ready made garments now accounts for over 40 per cent
of the value of total textile exports. The value of production of ready-made
garments for domestic market is estimated to be three times as much as for export
market. The fibre-mix pattern has also undergone changes due to improved
availability of man-made fibres and a shift in consumer preference towards this
fibre. The ratio of cotton to man-made fibre is now about 65:35. The fibre mix
pattern of fabrics has also undergone change and cotton-based fabrics which
accounted for over 70 per cent of the total fabrics production till 1988, now
accounts for about 50 per cent production. The remaining 50 per cent is contributed
by blended and 100 per cent non-cotton cloth.

The significant growth in textile industry so far has led to an increase in the
availibility of textile products for both home consumption and exports. Thus, the
per-capita availability of cloth has increased from17 sq. meters in 1982 to about 30
sq. meters in 1998-99. Likewise, exports of textile products have grown
significantly from Rs.14410 crore ($ 5797 million) in 1991-92 to Rs.41828 crore
($ 11839 million) in 1996-97, thus recording a compounded annual growth of 23.8
per cent in rupee terms and 15.4 per cent in dollar terms during this period. The
growth in exports slowed down thereafter due to demand constraints and the South
East Asian economic crisis but in the current year exports have begun to took up.

However, the industry has to work hard, improve certain areas of weaknesses and
enhance its competitive strength not only to retain but also improve its position in
the textile map of the world, particularly in the context of the emerging
liberalisation and globalisation of textile product and trade. For this purpose,
coordinated and complementary efforts are required on the part of the industry, the
Central and State Governments Export Promotion Councils, Textile Research
Associations and the like, in areas such as upgradation of technology, improvement
in quality and availability of raw materials, enhancement of quality production and
incorporation of information technology for improving design, enlarging business
and commerce.

Technology Upgradation

The rate of absorption of modern machinery and technology in the industry has
been slow and this is increasingly affecting costs and productivity efficiency. An
upward shift in technology and incorporation of modern machinery is absolutely
necessary for ushering in rapid quantitative changes in production commensurate
with consumer preferences at home and abroad. The Government on its part has
launched the Technology Upgradation Fund Scheme (TUFS) from 1st April, 1999
to give the industry access to timely and adequate capital at internationally
comparable rates of interest for upgrading its technology and improving its
competitiveness as well as long-term viability. The industry must take advantage of
this opportunity and overhaul the outdated technology-mix being used in different
sectors of the industry, particularly the decentralised sector.

Raw Materials

Cotton remains the major textiles base in our country even though there has been a
shift in consumer preferences in recent years towards man-made fibres. The supply
and price constraint of cotton requires to be removed by improving productivity
and reducing costs. Simultaneously, the techniques of ginning and pressing must be
improved to reduce contamination and make available quality cotton. While the
Government is actively considering the launching of Technology Mission on
Cotton (TMC) for the purpose, the ginning and pressing units can take advantage
of the TUFS, improve techniques and effectively increase the availability of quality
cotton.

Likewise, the production of man-made fibre and yarn has also to be sustained at a
high rate so that the production of quality man-made fabrics for domestic and
export consumption may increase. The world trade in man-made apparels and even
made-ups has been rising fast but Indias share continues to be insignificant. The
Government has been taking steps to rationalise duties and encourage the
production and consumption of man-made textiles.

Raw silk is another important textile base in the country and the production of raw
silk has to be increased for meeting the growing domestic and export demand for
silk products. Extensive on-firm side research and extension activities need to be
undertaken for breeding superior silk worm races and improving techniques of silk
worm rearing. On the post-cocoon side, it is necessary to popularise multi-end
reeling package for reeling quality silk. The Central Silk Board has been operating
catalytic development schemes for product development and diversification in
sericulture. In the meantime, to meet the shortfall in the supply of superior grade
mulberry raw silk. The Government has permitted canalisation of such silk through
specialised agencies.

Product Development

The future growth, particularly in export markets, will come mainly from exports
of value-added items including made-ups and apparels. It is, therefore, imperative
that our industry must gear up to integrated consumer tastes and preferences in
their production and develop marketing infrastructure so as to service both
domestic and international requirements timely and effectively. The industry can
contribute towards development of marketing infrastructure through their own
association and export promotion councils. The Government has set up seven
National Institute of Fashion Technology Centres providing skilled human
resources to the apparel and textile industry. Besides, the Government has
equipped certain Powerloom Service Centres, Weavers Service Centres and
Training Institutes. The industry can take help from these organisations in meeting
their design requirements. It has also been decided to set up a National Design
Centre for Handlooms.

Information Technology

The efforts to increase the competitive strength of the industry as a whole will
depend on how fast the industry can integrate various I.T. solutions including ERP
solutions, CAD/CAM and other I.T.-based tools for improving the speed and
quality of production, reducing time lag in deliveries, marketing and in cutting
down overall time overrun. In fact, countries like Japan and USA are adopting I.T.
solutions like Quick Response (ARS) which are reportedly capable of cutting down
apparel pipeline time substantially and thus effect significant savings in cost. Some
variants of these solutions may also be tried in our apparel sector in particular so
that we can compete with these advanced countries successfully. I.T. solutions can
easily be adopted by small and medium units and these units have the added
advantage of adaptability and flexibility in production, which large units often do
not have. Realising the potential of I.T. in the textile sector, the Government
declared 1999 as I.T. Year in Textiles and organised seminars and awareness
programmes at various places to bring home the advantages of I.T. integration in
production and marketing.

Joint Ventures

It is important to note that the production environment in textiles all over the world
is undergoing changes. Countries are trying to complement their own comparative
advantage, whether in technology or in raw materials or in finance, by forging joint
ventures or production or marketing tie-ups with other countries to increase their
overall competitive strength. The Indian textile industry may also like to explore
this route for enhancing comparative advantage and convert it into competitive
strength.

Export

Till the phasing out of the Multi Fibre Agreement (MFA) by the end 2004, the
Government has made all efforts to streamline the textile quota regime, so as to
benefit the textile trade and industry. As soon as the present Government took over,
the formulation of a suitable export quota policy for the period 2000-2004 was
given priority and consequently, a new Quota Policy was announced in October,
1999. The new policy seeks to achieve continuity and stability with competition.
The policy has also attempted to simplify procedures, ensure time-bound action in
case of apparels and encourage fast utilisation of quotas. The Policy also attempts
to give a boost to Technology Upgradation Fund Scheme (TUFS) by linking with
investments under Manufacturers Entitlement and New Investment Entitlement.

Textiles in the New Millennium

Needless to say that the textile industry has several challenges ahead and re-
orientation of the industry, both organic and systemic, is required to enhance its
competitive strength and improve its global positioning in the new millennium. In
this effort, the Governments initiative, some of which have been outlined above,
may not be sufficient. The industry including the textile machinery sector and
related organisations must supplement these initiatives in a more proactive manner,
so that the industry achieves cost reduction, attains quantum jump in quality
production and improves delivery systems.

Country's per capita consumption of textiles in 2012 increased 5 per cent to 25.93
metres valued at Rs 2,862.87, as compared with previous year's utility of 24.70
metres for Rs 2,473,64. Overall per capita consumption had gone up by five per
cent over the previous year and the same has gone up by 16 per cent in monetary
terms, according to a survey. The survey 'Markets for Textile and Clothing:
National Household Survey 2013' was conducted by the Textile Committee.

While the per capita consumption of textiles by men increased by 48 per cent, that
of women rose at a lesser rate by 43 per cent, it said. In monetary terms, the per
capita purchase of textiles between 2000 and 2012 registered a growth of 79 per
cent. The survey collected bimonthly textile purchase information for 2011 and
2012 from 13,280 households spread across 105 urban and 252 rural centres in the
country. The committee estimated the population of the country in 2012 as 1.22
billion, residing in 24.87 crore households.

Total consumption based on the estimated population stood at 31,636 million

metres during 2012. While aggregate consumption in 2012 increased by 5.87 per
cent in quantitative terms, the same increased by 16.69 per cent in value terms over
the previous year. During 2000 to 2012, aggregate purchase of all textiles
registered 76 per cent growth in quantitative terms and 138 per cent growth in
monetary terms. The CAGR of aggregate purchase of all textiles in terms of
quantity and value stood at 4.54 and 10.67 per cent respectively.

It added consumption of all textiles from rural areas accounted for 62.50 per cent
of total consumption and that of urban areas at 37.50 percent. However, the per
capita consumption of textiles in rural areas stood at 23.54 metres against the urban
area's 31.20 metres.
KEYWORDS

WCM
Working Capital (wc) is the flow of ready funds necessary for the working of a
concern. It comprises funds invested in Current Assets (cas), which in the ordinary
course of business can be turned into cash within a short period without
undergoing diminishing in value and without disruption of the organization.
Current Liabilities (cls) are those which are intended to be paid in the ordinary
course of business within a short time. Every company has to make arrangements
for adequate funds to meet the day-to-day expenditure apart from investment in
Fixed Assets (fas). The internal resources of a business organization often are
insufficient for meeting all its needs. Also it is not always possible for the owners,
promoters or the entrepreneurs to mobilize finance from their personal resources.
Resources, therefore, have had to be fi- nanced through borrowing, keeping in
view the short, medium and or long term requirements of trade or industry for
funds.

Working capital management refers to a company's managerial accounting strategy

designed to monitor and utilize the two components of working capital, current
assets and current liabilities, to ensure the most financially efficient operation of
the company. The primary purpose of working capital management is to make sure
the company always maintains sufficient cash flow to meet its short-term operating
costs and short-term debt obligations.

EBIT
EBIT measures the profit a company generates from its operations, making it
synonymous with "operating profit." By ignoring tax and interest expenses, it
focuses solely on a company's ability to generate earnings from operations,
ignoring variables such as the tax burden and capital structure.
This focus makes EBIT an especially useful metric for certain applications. For
example, if an investor is thinking of buying a firm out, the existing capital
structure is less important than the company's earning potential. Similarly, if an
investor is comparing companies in a given industry that operate in different tax
environments and have different strategies for financing themselves, tax and
interest expenses.
PERFORMANCE INDEX
A stock index that includes all dividends and other cash events paid out to
shareholders. When measuring the performance over a given time period, the
performance-based index will add in any dividend amounts to the net share price
before calculating the index return.

Performance Index (PI) = Sales Index x Working Capital Utilization Index

PI = Current Year sales/Previous Year sales} x {Previous year size of WC

(Component wise)/ Current year size of WC (Component wise)}

UTILIZATION INDEX

In business, the utilization rate is an important number for firms that charge their
time to clients. It shows the billing efficiency of an individual or a firm. The first
method calculates the number of billable hours divided by the number of hours
recorded in a particular time period.

UI = {Current Year sales/Previous Year sales} x {Previous year size of WC /

Current year size of WC }
(c) Efficiency Index (EI):
EI is the product of PI and UI. It is computed by multiplying the overall PI with
UI. Thus the formula for calculating the EI is as follows:

EIwcm= PI wcmx UI wcm

REVIEW OF LITERATURE

Experts (William 1939) determined the factors of WC and pointed out that WC is
an element to be considered in fixing the rate-base. Maintenance of adequate wc is
an essential condition for efficient financial management (Mohan 1991). WC offers
huge cash opportunities that could be released with sustainability within a relative
short period of time (Loneux 2004). Inventory, receivables, cash and working
finance are the four problem areas of WCM (Mishra 1975). Inventory represents
more than 61% of the total CAS of the firm (Swamy 1987). WC has been financed
from internal as well as external sources (Fazeeria 2002).

Companies have increasingly been relying on short-term funds particularly short-

term bank credit and trade credit (Gupta and Sharma 2003). WC ratios are useful
tools in appraising the financial strength and; immediate solvency of a firm (Sagan
1955). Current and quick ratios registered insignificant associations whilst the
comprehensive liquidity index indicated significant associations with return on
investment (ROI) (Smith and Bahaman 1997). The lower the level of liquid assets,
the greater will be the risks of not being able to meet current obligations (Van
Horne 1969).

The major reason for slow progress of an undertaking is shortage or wrong

management of WC (Siddarth and Das 1993). Due to lack of a proper plan for WC
requirements most firms often experience excess WC or shortage of WC (Agarwal
1977). Firms are able to reduce financing costs/or increase the funds available for
expansion by minimizing the amount of funds tied up in CAS. There is a
significant difference among industries in WC measures across time (Krueger
2002). The way in which WC is managed will have a significant impact on the
profitability of companies. This is a significant () ve relation between gross
operating income and the number of days of accounts receivable, inventories and
accounts payables. The () ve relation between account payables and profitability
is consistent with the view that less profitable companies wait longer to pay their
bills (Deloof 2003). The chief executives properly recognize the role of efficient
use of WC in liquidity and profitability, but in practice they could not achieve it
due to suboptimum utilization of WC (Prasad 2001). The Public Sector Enterprises
(PUSU) could improve the WCME by reducing their dependence on outside funds
(Jain 1988).

Efficient WCM is necessary for achieving both liquidity and profitability of a

company. A poor and inefficient WCM leads to tie up funds in idle assets and
reduces the liquidity and profitability of a company (Reddy and Kameswari 2004).
Efficient liquidity management involves planning and controlling CAS and CLS in
such a manner that eliminates the risk of inability to meet due short-term
obligations and avoids excessive investment in these assets. The CCC has been one
of the more important measures of liquidity than the current ratio that affects
profitability. There is a ()ve relationship between profitability and liquidity
indicators such as current ratio and cash gap (Eljelly 2004). WCM could vitally
affect the health of the firm (Sagan 1955). Industry practices, company size, future
sales growth of company, the proportion of outside directors on a board, executive
compensation (current portion), and CEO share ownership significantly influence
the WCME of a company (Kieschnick 1960). Formeasuring WCME, performance,
utilization, and overall efficiency indices were used, instead of some common
WCM ratios (Gosh and Maji 2003).

There is a strong () ve relation between CCC and corporate profitability of a large

sample of listed American companies during 19751994 (Shin and Soenen 1998).
There is a significant + ve relationship between profitability, measured through
gross operating profit, and CCC. Profit can be created by handling correctly the
CCC and keeping each of the different components (accounts receivables, accounts
payables, inventory) to an optimum level (Lazaridis and Tryfonidis 2006). There is
a significant ()ve relationship between WCM and profitability. The greater the
CCC, the lesser will be the profitability. There is a significant () ve relationship
between liquidity and profitability. There is also () ve relationship between debt
used by the firmand its profitability (Rehmann 2007).

H1: There is no significant efficiency in the use of various components of CAS for
enhancing sales in the Textile industry.
H2: There is no significant relationship between WCM efficiency and EBIT of the
textile industry in India.

Methodology, Sources of Data and Sampling Design

The study used only secondary data, which are collected from the CIME prowess
(package). The collected data from this source have been compiled and used with
due care as per the requirements of the study. Originally the sample for this study
had been planned to choose from the list of companies listed in National Stock
Exchange (NSE).

Variables Used for Analysis of Data

Analysis I: WCM Efficiency

The first part of the analysis is the measure of WCM efficiency for which three
indexes are used, viz., Performance Index (PI), Utilization Index (UI) and,
Efficiency Index (EI).
n
Wi(t1)
PI wcm=Is
i=1 Wit (1)
N

Where Is = sales index defined as St /St1, Wi = individual group of CAS, N =

number of cas group, and i = 1, 2, 3, . . . N.

At 1
UIwcm= At
. (2)

Where A = (current assets)/sales.

EIwcm = PIwcm UIwcm. (3)

Analysis II: NET EBIT

The second part of the analysis is the measure of Net EBIT, for which the
Following equation is formulated, based on the basic indicator.

The general form of the model is:

EBITit = 1(PIit) + 2(UIit) + 3(EIit) + 4(CCCit)
+ 5(FFARit) + 6(FDRit ), (4)

Where EBITit = Earnings Before Interest & Tax (i at time t; i = 1, 2, 30

companies), ccc = Cash Conversion Cycle = No. of Days A/R + No. of Days
Inventory No. of days a/p; FDR = Financial Debt Ratio = (Fixed Financial
Assets)/(Total Assets); FFAR= Fixed Financial Assets Ratio = (Short Term Loans +
Long Term Loans)/(Total Assets).

Industry Analysis and Findings

An evaluation of WCM efficiency of the Textile industry as a whole is done here. It
can be observed vide table 2 that there are occurrences of the PI, UI and EI values
of above 1 in 3, 5 and 4 respectively out of 9 years. In many years, PI and EI
values are < 1, but mean value of PI is nearer to 1 (0.93) and EI value is 1.01. This
 shows that the Textile Industry has satisfactorily managed its WC while handling
its CAS for generating sales and has adopted a moderate WCM policy.

EBITit = -5.959(PIit) 7.811(UIit) + 9.983(EIit) - .364(CCCit)

-.135(FFARit) - .876(FDRit )

Regression

Variables Entered/Removeda
Variables Variables
Model Entered Removed Method
1 EI, FFAR,
FDR, CCC, . Enter
b
PI, UI
a. Dependent Variable: EBITDA
b. All requested variables entered.

Model Summaryb
Std. Change Statistics
Error of
R Adjusted R the R Square Sig. F
Model R Square Square Estimate Change F Change df1 df2 Change
1 1.000a 1.000 .998 6.53067 1.000 739.032 6 2 .001
a. Predictors: (Constant), EI, FFAR, FDR, CCC, PI, UI
b. Dependent Variable: EBITDA

ANOVAa
Sum of Mean
Model Squares df Square F Sig.
1 Regression 189116.545 6 31519.424 739.032 .001b
Residual 85.299 2 42.650
 Total 189201.844 8
a. Dependent Variable: EBITDA
b. Predictors: (Constant), EI, FFAR, FDR, CCC, PI, UI

results disclose that invdays has an insignificant ()ve co-efficient with

ebit. On the other hand, the coefficients of fixdfra with ()ve in sign
and that of lnsales with +ve in sign are significant at 1 per cent level.

Coefficientsa
Standard
ized
Unstandardized Coefficie 95.0% Confidence Collinea
Coefficients nts Interval for B Statisti
Lower Upper Tolera
Model B Std. Error Beta t Sig. Bound Bound nce V
1(Constant) 16.49 . 7731.25
6131.552 371.795 4531.847
2 004 7
FFAR - .
-160.319 22.309 -.135 -256.306 -64.332 .643 1
7.186 019
CCC -
.
-8.647 .621 -.364 13.92 -11.319 -5.975 .329 3
005
3
FDR -
. -
-1091.567 32.988 -.876 33.09 -1233.503 .322 3
001 949.631
0
PI -
- . 16
-2825.261 291.987 -5.959 -4081.581 1568.94 .001
9.676 011
0
UI -
- . 29
-3520.538 370.625 -7.811 -5115.208 1925.86 .000
9.499 011
7
EI 10.21 . 4271.80 42
3005.720 294.257 9.983 1739.632 .000
5 009 7
a. Dependent Variable: EBITDA

Relationship between WCM Efficiency and EBIT

The relationship of Earnings before Interest and Taxes (EBIT) of the textile
industry with efficiency of WCM is evaluated here. EBIT is taken as the proxy and
CCC, APdays, ARdays, INVdays are considered as measures of WCM efficiency
in the analysis. Apart from these variables, fixdfara, findbtra and size (natural log
of sales) are considered as control variables in the regression model.

First, correlation among all selected variables is worked out and ols regression is
run, the results of the regression. From the regression results, it is apparent that
APdays has a significant ()ve association with EBIT, which indicates that a more
profitable firm delays its payment to its suppliers. The other three WCM efficiency
measures, CCC with +ve in sign, ARdays and INVdays with () ve in sign have an
insignificant one to one relationship with EBIT in the TEXTILE industry.

The +ve relationship of CCC shows that more profitable firms under textile
industry failed to reduce the CCC. From the results of regression between EBIT
and CCC it can be inferred that CCC has a significant ()ve relationship with
EBIT. Also, all the three control variables are related significantly with EBIT. The
relationships of fixdfra and findbtra are ()ve and that of the ln sales is +ve with
EBIT. The results show that larger firms with less fixed financial assets and
financial debt ratio earned more EBIT by decreasing the CCC remarkably under
the paper industry.

The regression results between EBIT and APdays show that APdays has a
significant +ve coefficient with EBIT. Further, among the control variables, the
coefficient of fixdfra is significant at 1 per cent level and that of the findbtra is
insignificant. On the other hand, size of firms is highly related to ebit with +ve in
sign. From the results, it is well established that the larger firms under the
TEXTILE industry with less fixed financial assets earned more EBIT by delaying
the payment to their suppliers.

Regarding the relationship between EBIT and ARdays, the results of regression
shown in table 5 reveal that the coefficient of ARdays is significant +vely, and
coefficients of all the control variables are significant but with a different sign.
While firm size is +vely related, fixdfra and findbtra are ()vely related to EBIT of
the firms under the textile industry. In sum, it is found that the larger firms with
less fixed financial assets and financial debt have generated more profit (after
operating cost) by increasing the credit period granted to their customers under the
textile industry. With regard to the impact of number of days in inventory
(inventory cycle) on the EBIT of the firms under the paper industry, the regression.

Collinearity Diagnosticsa
D Variance Proportions
i
m
e
n
si
o Eigenva Condition (Consta
Model n lue Index nt) FFAR CCC FDR PI UI EI
1 1 6.718 1.000 .00 .00 .00 .00 .00 .00 .00
2 .190 5.944 .00 .00 .00 .00 .00 .00 .00
3 .083 9.000 .00 .00 .00 .00 .00 .00 .00
4 .004 39.483 .00 .55 .08 .05 .00 .00 .00
5 .004 43.752 .00 .00 .05 .49 .00 .00 .00
6 .001 93.953 .02 .26 .82 .02 .00 .00 .00
7 9.376E-
846.507 .98 .19 .05 .43 1.00 1.00 1.00
6
a. Dependent Variable: EBITDA

Residuals Statisticsa
Minimu Maximu Std.
m m Mean Deviation N
Predicted Value 60.6273 477.7798 329.8522 153.75164 9
Residual -5.89517 6.36809 .00000 3.26533 9
Std. Predicted
-1.751 .962 .000 1.000 9
Value
Std. Residual -.903 .975 .000 .500 9
a. Dependent Variable: EBITDA

Tools Used for Analysis

To analyze the WCM efficiency of the textile industry in India, statistical
techniques viz Minimum, Maximum, Mean, Standard Deviation and Coefficient of
Variation, Correlation, and Regression Matrix have been used.

To ascertain the linear trend and sign of growth in various components of WC

ratios, the simple regression technique has been extensively used.
Limitations and Scope for Further Study
The study is confined to ten years data only, i. e. from 20072016, therefore, a
detailed analysis covering a lengthy period, which may give slightly different
results has not been made.
The study is based on secondary data collected from the CIME prowess
(package), therefore the quality of the study depends purely upon the accuracy,
reliability and quality of the secondary data source. Approximation, and relative
measures with respect to the data source might impact the results.
The study is based on few companies of the textile Industry in India that are also
drawn from the companies listed in BSE. Therefore, the accuracy of results is
purely based on the data of sample units. If one takes sample units from, say, nifty
the results may go slightly differently.

PI UI EI
1.163013 0.935028 1.08745
1.08347 1.124 1.21782
1.982399 0.983978 1.950637
0.967465 1.005072 0.972372
1.276491 1.081643 1.380708
0.934224 0.969575 0.9058
0.969125 1.003308 0.972331
1.048419 0.958653 1.00507
1.29224 0 0

H1: There is no significant efficiency in use of various components of cas

for enhancing sales in the textile industry.
The h1 is rejected; numerically the overall pi (> 1) indicates efficient WCM.
Average value of PI, as a whole, shows that the PI is > 1 for 10 firms out of 30
firms. Thus, the performance of the industry as whole in WCM was mostly
efficient during the period of study. Regression results for UI it is understood that
14 out of 30 firms ( coefficients > 1) are successful in establishing their efficiency
in the Textile industry in the matter of utilization of CAS as a whole in enerating
sales.
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