Title: The Influence of Working Capital Management on Firm’s Profitability: A Review of Conservative and Aggressive Strategy
Authors: Muhammad Awais
Volume: 1
Issue: 8
Pages: 186-193
Publication Date: 2017/10/28//
Abstract:
This research aimed at evaluating the influence of working capital management on firm’s profitability with reference to conservative and aggressive working capital management strategy. The targeted population was all firms relating to textile, automobile and cement sectors listed on KSE. Out of these all companies, 45 were selected as a final sample. The responses were analyzed through correlation and regression analysis. This study indicated that managers could maximize their profitability of the firm by achieving an optimal level of working capital, and profitability will decrease in case of deviation from optimal level. This study indicates that accounts receivables, accounts inventories, and cash conversion cycle should decrease and accounts payable should increase to enhance profitability. Moreover, this study provides new evidence from Pakistan on finding the influence of working capital level on profitability