For the successful working of any business organization, fixed and current assets play a vital role. Management of working capital is essential as it has a direct impact on profitability and liquidity. An attempt has been made in this paper to study the working capital components and the impact of working capital management on profitability of Hindalco Industries Limited. The paper also makes an attempt to study the correlation between liquidity, profitability and Profit Before Tax (PBT) of Hindalco. The study is based on secondary data collected from annual reports of Hindalco for the study period 1990 to 2007. The ratio analysis, percentage method and coefficient of correlation have been used to analyze the data. Multiple regressions were used to check the significant impact on the profitability of Hindalco.