Inventory management and financial performance with special reference to public sector listed manufacturing firms

Abstract

Inventory management is generally recognized to be of sufficient importance towarrant the appointment of a person to carry specific responsibility for it .The studyinvestigated the relationship between inventory management and financialperformance. The researcher used inventory turnover ratio and average age ofinventory as independent variable and gtoss profit and net profit as dependentvariable. Now a days most of companies highly consider about inventory managementsome of the organrzation implement different tool such as JIT some are applied ERP,SAP systems to control their inventory efficiently and effectively hence the studyemployed descriptive analysis, correlation analysis and regression analysis toinvestigate effect of inventory management, on the selected listed manufacturingcompany performance. According to the analysis result in the researcher identifiedinventory management had a positive relationship, gross profit margin and net profitmargin.