IMPACT OF WACC ON THE PROFITABILITY OF COMPANIES A CASE OF LEATHER INDUSTRY

Abstract

Purpose: The Purpose of this study is to find out whether working capital management affects the performance of leather industry or not, For every Organization WCM is important source of success and going concern. The performance of company Drive from profitability of company. Working capital management is very important now for managing the current assets and current liabilities. Company may be having great amount of working capital to boost their company value. According to previous research it has been proved that their is link between working capital and with the performance of company. Research Methodology This research work depends on the 10 year financial statement (2007-2016) of 3 leather industry to measure the performance, Basically the performance the is calculated in term of the profitability by the help of returns on assets(ROA), return on equity(ROE), EPSearnings per share and GP%. The research carries out on 2 variables which are considered as dependent variable, & another is the independent variable used in measure and identify the situation of the organization. The elements of the variables are these: 1- Dependent variables are these: a. Return on Assets b. Return on equity c. Net Income d. Earnings per share 2- Independent Variable a. Debt Ratio b. WACC c. Total Assets Findings of the Research The key finding of this current study is that working on the cost of capital finding for the case of leather industry which we selected in the leather sector i.e. Bata'&service and then work on to find the impact of cost of capital and what is the impact on the entities’ profitability profile specifically focusing our study on the leather sector, & ascertain relationships with respect to the selected dependent & independent variables