Entrepreneurial Efficiency in Managing Working Capital: A Case Study of JK Paper Ltd., India

Abstract

In today's manufacturing organizations, the efficient management of working capital has a direct impact on liquidity, profitability, continuity, and sustainability and is a key element of entrepreneurial and financial efficiency. The present study investigates the entrepreneurial efficiency of working capital management of JK Paper Ltd., one of the major paper manufacturing companies in India for the last five years (2021-2025). In particular, it examines the liquidity position of the company with the current ratio and the profitability position of the company with return on capital employed (ROCE) and the statistical relationship between the current ratio and ROCE. The study is based on secondary data using audited annual reports and financial statements. Financial ratio analysis, Karl Pearson's correlation coefficient, and an independent t-test were used to analyze the data. The liquidity position showed that JK Paper Ltd. has a consistently healthy status throughout the liquidity position during the study period (the current ratio has never exceeded the benchmark of 2:1). The profitability position has increased significantly from the year 2021 to 2023 (with the highest ROCE being 21% in 2023) and has declined in the year 2024 and 2025. The correlation analysis showed a weak positive coefficient (r = 0.31) and the t-test showed that the correlation was not significant (t = 0.56, df = 3, p > 0.05). The results indicate the importance of entrepreneurial efficiency in maintaining operational and financial stability, as well as the fact that profitability is influenced by a wider range of macroeconomic and operational factors than liquidity alone.

Keywords: Entrepreneurial efficiency, working capital management, liquidity, profitability, return on capital employed, and manufacturing firms.