Impact of working capital management on firms profitability: A case of Pakistani listed firms
Rizwan Waheed, Nadeem Sohail, Muhammad Sajid, Shoaib Masood Khan
Abstract
Rizwan Waheed, Nadeem Sohail, Muhammad Sajid, Shoaib Masood Khan
Abstract
The Working Capital Management checks that company has satisfactory cash flow in order to meet their short term debts and operating expenses. The impact among working capital and firm's profitability is examined for the management of cash cycle management. Three sectors are selected as a sample size: Electricity, Automobiles & Parts and Oil & Gas sectors. The period of the study is from 2009–2012. The data are collect from the official's websites of companies by their annual reports. In this study, (NWC) networking capital and other variables are taken as independent variables and (PFT) Profitability is taken as dependent variable. In the combined analysis the NWC is positive coefficient and significantly impact on profitability. Hence, NADRT is negative coefficient and significant impact on PFT.
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The Working Capital Management checks that company has satisfactory cash flow in order to meet their short term debts and operating expenses. The impact among working capital and firm's profitability is examined for the management of cash cycle management. Three sectors are selected as a sample size: Electricity, Automobiles & Parts and Oil & Gas sectors. The period of the study is from 2009–2012. The data are collect from the official's websites of companies by their annual reports. In this study, (NWC) networking capital and other variables are taken as independent variables and (PFT) Profitability is taken as dependent variable. In the combined analysis the NWC is positive coefficient and significantly impact on profitability. Hence, NADRT is negative coefficient and significant impact on PFT.
Key concepts: Working capital, Profitability index, Business, Free cash flow, Sample (material), Finance, Cash flow, Accounting