A Cross Section Study Of Demand For Working Capital In The Automobile Industry

The aim of the study is to determine empirically whether transactions of working capital balances including cash and inventories vary proportionately or less than proportionately to changes in the volume of sales. The study also describes the effect of capital costs on working capital holdings of the selected companies in the Indian automobile industry. The results of the study showed that Indian automobile industry and its three sectors need to hold working capital balances depends not only on sales but on holding costs also.