International Journal of Scientific Research and Engineering Development

Working Capital Management (WCM) is a fundamental element of financial management that governs the operational efficiency and financial sustainability of firms. In the hotel industry, WCM assumes even greater significance owing to unique challenges such as seasonality, perishability of inventory, credit-based transactions, and high operational costs. This study investigates the impact of working capital management on the liquidity and profitability of Lemon Tree Hotels for the period 2021–2025. Using secondary data from audited financial statements and employing ratio analysis, trend analysis, correlation analysis, and descriptive analysis, the study evaluates the behaviour of current assets and current liabilities and their effects on key financial indicators. Findings reveal that despite negative working capital emerging post-2022, the company demonstrated a significant improvement in profitability. Receivables and payables management emerged as the most influential components of working capital performance. The study concludes that effective working capital practices are essential for maintaining liquidity and enhancing profitability, particularly in the dynamic and competitive hospitality sector.

Preethi M, Mr.M.Showmiyan, "Working Capital Management and Its Impact on Liquidity and Profitability: A Study of Hotel Industry" International Journal of Scientific Research and Engineering Development, V9(3): Page(616-621) May-June 2026. ISSN: 2581-7175. www.ijsred.com. Published by Scientific and Academic Research Publishing.