Relationship between Working Capital Management and Firm’s Profitability.

تاریخ : اگست ۲۰۱۳ - جولائی ۲۰۱۴

The main purpose of the research is actually to find out empirical influence from the relationship between working capital management and profitability of Pakistan cement sector. With regard to regard that research quantitative means of study approach to check the research hypothesis. For this particular research the researcher examined the data of 10 listed companies on Karachi stock exchange 100 index of cement sector of Pakistan. For this purpose data from 2009 to 2013 have examined. The research concludes the positive significant relationship of working capital management and firm’s profitability. In this examination net profit ratio is considered as dependent variable and current ratio, quick ratio, inventory turnover ratio and net current asset to total asset are being used as independent variables. The study shows that the relationship of net profit and current ratio is strong positively significant. The impact of current ratio on net profit is also positive. We have seen in this study the dependent variable net profit is negatively significant related to the independent variable of quick ratio. The quick ratio is having a negative impact on net profit. The dependent variable has the strongly negative significant relationship with the inventory turnover ratio and inventory turnover ratio also has a strong negative impact on net profit. The relationship between net profit and net current asset to total asset ratio is negatively insignificant. Net current asset to total asset ratio has negative impact on net profit.