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

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Dr. Asghar Ali
Dr. Asghar Ali
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Syed Atif Ali
Syed Atif Ali
α University of Lahore

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

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Abstract

Firm’s financial management policies compose of very 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.

References

14 Cites in Article
  1. T Afza (2007). Is it better to be aggressive or conservative in managing working capital.
  2. T Afza (2007). Working Capital Management Policies of Firms: Empirical Evidence from Pakistan.
  3. Amarjit Gill,N (2010). The Relationship Between Working Capital Management And Profitability: Evidence From The United States.
  4. B Appuhami (2008). The Impact of Firms' Capital Expenditure on Working Capital Management: An Empirical Study across Industries in Thailand.
  5. K Asress (2003). Determining working capital solvency level and its effect on profitability in 6. Deloof, D.
  6. V Ganesan (2007). An analysis of working capital management efficiency in Telecommunication equipment industry.
  7. Anjay Kumar Mishra (2010). Evaluating the Relationship Between Working Capital Management and Profitability: Insights from Nepal.
  8. P Jung (2009). Best-Practice Working Capital Management: Techniques for Optimizing Inventories, Receivables, and Payables.
  9. I Lazaridis (2006). Relationship between Working Capital Management and Profitability of Listed Companies in the Athens Stock Exchange.
  10. C Magpayo (2011). Effect of Working Capital Management and Financial Leverage on Financial Performance of Philippine Firms.
  11. Xiaoting Zhang (2006). Trends in working capital management and its impact on firms’ performance – An analysis of SMEs.
  12. Pedro Juan García-Teruel,P,-S (2007). Effects of working capital management on SME profitability.
  13. Dada Obafemi (2010). Working Capital Management and Corporate Financial Performance of Consumer Goods Sector in Nigeria.
  14. M Semra Karacaer (2009). An Analysis of the impact of working capital accruals on corporate earnings in Turkey.

Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Dr. Asghar Ali. 1970. \u201cWorking Capital Management: Is It Really Affects the Profitability? Evidence from Pakistan\u201d. Global Journal of Management and Business Research - A: Administration & Management GJMBR-A Volume 12 (GJMBR Volume 12 Issue A17): .

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GJMBR Volume 12 Issue A17
Pg. 75- 78
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Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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Firm’s financial management policies compose of very 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.

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

Dr. Asghar Ali
Dr. Asghar Ali University of Lahore
Syed Atif Ali
Syed Atif Ali

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