Working Capital Management: Is It Really Affects the Profitability? Evidence from Pakistan

Firm’s financial management policies compose ofvery important decisions including working capital management. Working Capital of a firm comprises on current assets. Current assets are cash and equivalents, accounts receivable, and inventory items of a firm. Working Capital Management is applying Investment and Financing Decisions to Current Assets. Most of the researchers found a positive impact of working capital management decisions on profitability of organizations. It directly affects the liquidity and profitability of the firm. In this research article, 15 research papers of different scholars have been studied and compared. The results showed impact of working capital on profitability and supported the hypotheses.