Variables Affecting Working Capital Management of Tata Motors: Factor Analysis Approach Using R Programming

IJIRT | Volume 6 Issue 10 | March 2020

Posted: 14 Apr 2020

See all articles by Nitin Untwal

Nitin Untwal

Maharashtra Institute of Technology (MIT)

Date Written: March 13, 2020

Abstract

Today, several factors contribute to the working capital management are difficult to examine. Data collected on these factors often has several variables. It is a non-trivial exercise to determine which of the factors that significantly influences the working capital. This paper adopts the use of Principal Component Analysis (PCA) on the several variables expected to influence the working capital management of Tata Motors. The principal component analyses have identified the factors and are expected to assist the mangers to identify areas where they might improve financial performance of their operation. Finally the variables ROA, DTO, ITO, CSR, CR are having communalities greater than 0.5 are incorporated and Each variable is loaded on a single component, thereby enhancing the interpretability of the factors. The variables can be broadly classified in to four viz, profitability (ROA), efficiency (DTO and ITO), absolute liquidity(CSR) and liquidity factor(CR). The above identified variables can be used for multiple regression analysis.

Keywords: Working Capital Management, Factor Analysis using R

JEL Classification: G

Suggested Citation

Untwal, Nitin, Variables Affecting Working Capital Management of Tata Motors: Factor Analysis Approach Using R Programming (March 13, 2020). IJIRT | Volume 6 Issue 10 | March 2020 , Available at SSRN: https://ssrn.com/abstract=3553948

Nitin Untwal (Contact Author)

Maharashtra Institute of Technology (MIT) ( email )

Pune
India

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
180
PlumX Metrics