Operational Efficiency through Activity-Based Ratios: A Comparative Analysis of Nifty Metal Index Listed Companies
DOI:
https://doi.org/10.53983/ijmds.v15n07.003Keywords:
Operational Efficiency, Activity-Based Ratios, Inventory Management, Receivables Management, Payables Management, Nifty Metal IndexAbstract
Efficient management of inventories, receivables, and payables is essential for improving operational performance in the steel industry. This study examines the operational efficiency of Adani Enterprises Ltd., JSW Steel Ltd., and Tata Steel Ltd., selected from the Nifty Metal Index, during the period 2022–2026. The analysis is based on five activity-based ratios: Raw Material Turnover Ratio, Work-in-Progress (WIP) Turnover Ratio, Finished Goods Turnover Ratio, Debtors' Turnover Ratio, and Creditors' Turnover Ratio. Secondary data were obtained from the Prowess database, and descriptive statistics and ranking techniques were used to compare the operational performance of the selected companies. The findings reveal noticeable differences in the efficiency of inventory and working capital management among the companies. Adani Enterprises Ltd. emerged as the best overall performer, demonstrating strong efficiency in raw material utilization, finished goods management, and payment to suppliers. JSW Steel Ltd. showed outstanding performance in managing work-in-progress inventory and maintained satisfactory receivables management, while Tata Steel Ltd. excelled in receivables collection but recorded comparatively lower inventory turnover performance. The study highlights that activity-based ratios provide a practical and reliable measure of operational efficiency and can help managers identify areas for improving resource utilization and operational performance. The findings offer useful insights for corporate managers, investors, and policymakers seeking to enhance efficiency and competitiveness in the Indian metal industry.
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