The Relationship between Working Capital Management and Profitability: Evidence from Pakistan

• Autorzy: Nadeem Iqbal , Naveed Ahmad , Zeeshan Riaz
• Języki publikacji: EN

Abstrakty

EN

In this paper secondary data is used for analysis of working capital on profitability. In this research paper we take working capital as independent variable and net operating profit as dependent variable. We have found a significant negative relationship between net operating profitability and the average collection period, inventory turnover in days, average payment period and cash conversion cycle for a sample of Pakistani firms listed on Karachi stock exchange. Previous theoretical research predicts negative relationship between cash conversion cycle and corporate profitability. The results of regression indicate that the coefficient of account receivable is negative; that is, the increase or decrease in average collection period wills significantly affect the profitability of the firm. According to interitem correlation matrix the relationship of account receivables, account payables and inventory with profit shows positive relationship but cash conversion cycle, financial debt and financial assets shows negative relationship with profitability. Inventory shows the positive relationship with dependent variable which proves that working capital management has a positive effect on firm's probability. (original abstract)

Słowa kluczowe

EN

Profit; Working capital; Management of working capital

PL

Zysk; Kapitał obrotowy; Zarządzanie kapitałem obrotowym

• Czasopismo: International Letters of Social and Humanistic Sciences (ILSHS)
• Rocznik: 2014
• Tom: 9
• Strony: 14--25

Twórcy

autor

Nadeem Iqbal

• Bahauddin Zakariya University, Bosan Road, Pakistan

autor

Naveed Ahmad

• Indus International Institute, Dera Ghazi Khan, Pakistan

autor

Zeeshan Riaz

• Baha Uddin Zakariya University, Punjab, Pakistan

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