“Working Capital Management and its Impact on Firm’s Performance”
Asif Iqbal, Wang Zhuquan

Abstract
Working Capital Management has its effect on liquidity as well as on profitability of a firm. In this paper we have analyzed the impact of working capital management on firm performance from Pakistani companies that are listed on Karachi stock exchange. Different variables such as ACP (Average Collection Period), Sales, CCC (Cash Conversion Cycle), ITID (Inventory Turnover in days), APP (Average Payment Period), and debts are used to analyze the effect of working capital management. Samples of 253 non financial firms were analyzed for a period of 6 years 2008-2013 for the analysis of different variables of working capital management. Net operating profitability is used as a dependent variable for the measurement of working capital management in this study. Sales, CCC, ITD, APP and Debts showed positive relationship to the dependent variable (NOP) while one component of WCM, ACP showed Negative relationship to NOP.

Full Text: PDF