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Firm Size: As a Moderator Between Working Capital Management and Firm Profitability

Amber Pervaiz

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Abstract

The study investigates weather firm size moderates the relation between working capital management (measured by cash conversion cycle) and firm profitability using the time period of 5 years (2013- 2018) for 60 non-financial firms. The findings of OLS regression reveals that firm size moderates the negative relationship between working capital management and firm profitability. The study suggests reducing cash conversion cycle to increase firm profitability and the managers should consider the firm size while making decisions regarding working capital management. Keywords: Cash Conversion Cycle, Working Capital Management, Profitability, Net Profit Margin, Firm Size DOI : 10.7176/JESD/10-13-03 Publication date :July 31 st 2019

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The study investigates weather firm size moderates the relation between working capital management (measured by cash conversion cycle) and firm profitability using the time period of 5 years (2013- 2018) for 60 non-financial firms. The findings of OLS regression reveals that firm size moderates the negative relationship between working capital management and firm profitability. The study suggests reducing cash conversion cycle to increase firm profitability and the managers should consider the firm size while making decisions regarding working capital management. Keywords: Cash Conversion Cycle, Working Capital Management, Profitability, Net Profit Margin, Firm Size DOI : 10.7176/JESD/10-13-03 Publication date :July 31 st 2019

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Available abstract

The study investigates weather firm size moderates the relation between working capital management (measured by cash conversion cycle) and firm profitability using the time period of 5 years (2013- 2018) for 60 non-financial firms. The findings of OLS regression reveals that firm size moderates the negative relationship between working capital management and firm profitability. The study suggests reducing cash conversion cycle to increase firm profitability and the managers should consider the firm size while making decisions regarding working capital management. Keywords: Cash Conversion Cycle, Working Capital Management, Profitability, Net Profit Margin, Firm Size DOI : 10.7176/JESD/10-13-03 Publication date :July 31 st 2019

Key concepts: Profitability index, Working capital, Cash conversion cycle, Moderation, Profit margin, Business, Profit (economics), Cash

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