Abstract: Working capital management in hospital equipment industries is not solely influenced by internal financial policies but is significantly shaped by external environmental factors such as government procurement systems, economic conditions, market competition, taxation policies, and market uncertainty. Hospital equipment industries, particularly in developing regions, operate under institutional and regulatory constraints that directly affect liquidity, cash flows, and operational efficiency. The present study examines the role of external factors in shaping working capital management practices of selected hospital equipment industries in Madhya Pradesh. The study is based on primary data collected from 40 respondents representing 10 hospital equipment companies operating in Indore, Bhopal, Jabalpur, and Gwalior. Descriptive statistics and Pearson’s correlation analysis were used to analyze the impact of government policies, economic conditions, and market-related factors on working capital management. The findings reveal a strong positive relationship between external factors and working capital management practices (r = 0.65, p < 0.01). The study concludes that government procurement policies, delayed payments, inflation, market competition, taxation, and market uncertainty significantly influence working capital planning and risk management. The paper provides valuable insights for industry managers and policymakers to design adaptive working capital strategies in a dynamic external environment.

Keywords:External Factors, Working Capital Management, Government Policies, Market Uncertainty, Hospital Equipment Industry, Madhya Pradesh.