Relationship between Working Capital Management and Profitability: A Case Study from Textile Sector of Pakistan (2024)

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Muhammad Hamid Soban Ahmad Zeeshan Haider Saif Rehman Abstract Muhammad Hamid Soban Ahmad (Contact Author) Zeeshan Haider Saif Rehman

12 PagesPosted: 1 Feb 2017

See all articles by Muhammad Hamid

Muhammad Hamid

University of Sargodha - Department of Business Administration

Soban Ahmad

University of Sargodha - Faculty of Management & Administrative Sciences; University of Sargodha; University of Sargodha

Saif Rehman

University of Sargodha

Date Written: January 29, 2017

Abstract

This study investigates the relationship between working capital management and profitability. In this research we have selected a sample of 92 Pakistani firms of textile sector for a period from 2006 to 2014. This study investigates the effect of different variables on net operating profit namely, Average collection period, Average payment period, Investing turnover in days cash conversion cycle, leverage and size of firm. Correlation and regression analysis are used for analysis. This study found that working capital management has significant negative effect on profitability of Pakistani textile sector. There is positive relationship between size and profitability.

Keywords: Working Capital Management, Leverage, Size, Profitability

Suggested Citation:Suggested Citation

Hamid, Muhammad and Ahmad, Soban and Haider, Zeeshan and Rehman, Saif, Relationship between Working Capital Management and Profitability: A Case Study from Textile Sector of Pakistan (January 29, 2017). Available at SSRN: https://ssrn.com/abstract=2907661 or http://dx.doi.org/10.2139/ssrn.2907661

Relationship between Working Capital Management and Profitability: A Case Study from Textile Sector of Pakistan (2024)

Abstract

University of Sargodha - Department of Business Administration ( email )

University of Sargodha - Faculty of Management & Administrative Sciences ( email )

University of Sargodha ( email )

University of Sargodha ( email )

University of Sargodha ( email )

University of Sargodha ( email )