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VOL. 10, ISSUE 3 (2024)
Optimizing return on assets: The influence of inventory turnover, revenue from operations, and current ratio
Authors
Chidananda H L, Angel Eelizabeeth, Kowshika, Anand
Abstract
The purpose of the study is to find out how
Return on Assets (ROA) is affected by the turnover of inventory, operating
revenue, and the current ratio taken together. Using ROA as the dependent
variable and inventory turnover, revenue from operations, and current ratio as
independent variables, this study examined financial ratios over a five-year
period, from 2019 to 2023. Regression analysis was performed using SPSS 20.0 to
ascertain the association between the independent variables and ROA utilizing
data that was obtained from Money Control. WIPRO's asset utilization and
profitability are positively impacted by effective inventory management, strong
revenue generation, and excellent liquidity, according to the analysis that
identified major predictors of ROA. The study also looked at the wider effects
of these financial measures on return on asset and discovered that favorable
current ratios, higher inventory turnover, and improved operating revenue are
all favorably correlated with return on asset. In particular, there were
notable positive correlations found between return on asset and Inventory
Turnover (β = 0.543, p <.001), Revenue from Operations (β = 0.489, p
<.001), and Current Ratio (β = 0.567, p <.001). The significance of
financial performance measurements in raising ROA is emphasized by the current
study. For managers and other stakeholders seeking to maximize asset use and
improve organizational performance, this research offers insightful
information.
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Pages:36-39
How to cite this article:
Chidananda H L, Angel Eelizabeeth, Kowshika, Anand "Optimizing return on assets: The influence of inventory turnover, revenue from operations, and current ratio". International Journal of Commerce and Management Research, Vol 10, Issue 3, 2024, Pages 36-39
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