Impact of Working Capital Management on Profitability of Textile Sector of Pakistan

Working capital can be considered as source of existence for a financial body and management of working capital is regarded as one of the most essential part of business management. This study aims to find out the impact of working capital policies on profitability. Return on assets is used as a m...

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Main Authors: Sumaira Tufail, Bilal, Javaria Khan
Format: Article
Language:English
Published: Isarder 2013-06-01
Series:İşletme Araştırmaları Dergisi
Subjects:
Online Access:http://www.isarder.org/isardercom/2013vol5issue2/vol.5_issue.2_article02fulltext.pdf
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spelling doaj-4e4cbef05bb44694adb97f9ec8d76adf2020-11-25T00:59:55ZengIsarderİşletme Araştırmaları Dergisi1309-07122013-06-01523256Impact of Working Capital Management on Profitability of Textile Sector of PakistanSumaira Tufail 0Bilal1Javaria Khan2Hailey College of Commerce University of the PunjabHailey College of Commerce University of the PunjabHailey College of Commerce University of the PunjabWorking capital can be considered as source of existence for a financial body and management of working capital is regarded as one of the most essential part of business management. This study aims to find out the impact of working capital policies on profitability. Return on assets is used as a measure of profitability. Current assets to total assets ratio is used to compute the investment policy of working capital management and to determine financing policy of working capital management current liabilities to total assets ratio is used. Other variables that are used in this study are quick ratio, debt to equity ratio and size of the firms. Secondary data of 117 textile firms listed on Karachi stock exchange is taken for a period of six years i.e. 2005-2010 to calculate all these variables. Results of the regression analysis show that aggressiveness of working capital management policies is negatively associated with profitability. Moreover liquidity and size of the firm have positive relation profitability whereas debt to equity ratio is negatively correlated with profitability. Textile sector is one of the majors sectors of Pakistan. It needs due consideration regarding the management of assets and liabilities. So, the aim of this study is to provide some useful recommendations for the people responsible for the management of this sector. This study also establishes the basis for future research in this area of business. http://www.isarder.org/isardercom/2013vol5issue2/vol.5_issue.2_article02fulltext.pdfWorking Capital ManagementProfitabilityTextile Sector
collection DOAJ
language English
format Article
sources DOAJ
author Sumaira Tufail
Bilal
Javaria Khan
spellingShingle Sumaira Tufail
Bilal
Javaria Khan
Impact of Working Capital Management on Profitability of Textile Sector of Pakistan
İşletme Araştırmaları Dergisi
Working Capital Management
Profitability
Textile Sector
author_facet Sumaira Tufail
Bilal
Javaria Khan
author_sort Sumaira Tufail
title Impact of Working Capital Management on Profitability of Textile Sector of Pakistan
title_short Impact of Working Capital Management on Profitability of Textile Sector of Pakistan
title_full Impact of Working Capital Management on Profitability of Textile Sector of Pakistan
title_fullStr Impact of Working Capital Management on Profitability of Textile Sector of Pakistan
title_full_unstemmed Impact of Working Capital Management on Profitability of Textile Sector of Pakistan
title_sort impact of working capital management on profitability of textile sector of pakistan
publisher Isarder
series İşletme Araştırmaları Dergisi
issn 1309-0712
publishDate 2013-06-01
description Working capital can be considered as source of existence for a financial body and management of working capital is regarded as one of the most essential part of business management. This study aims to find out the impact of working capital policies on profitability. Return on assets is used as a measure of profitability. Current assets to total assets ratio is used to compute the investment policy of working capital management and to determine financing policy of working capital management current liabilities to total assets ratio is used. Other variables that are used in this study are quick ratio, debt to equity ratio and size of the firms. Secondary data of 117 textile firms listed on Karachi stock exchange is taken for a period of six years i.e. 2005-2010 to calculate all these variables. Results of the regression analysis show that aggressiveness of working capital management policies is negatively associated with profitability. Moreover liquidity and size of the firm have positive relation profitability whereas debt to equity ratio is negatively correlated with profitability. Textile sector is one of the majors sectors of Pakistan. It needs due consideration regarding the management of assets and liabilities. So, the aim of this study is to provide some useful recommendations for the people responsible for the management of this sector. This study also establishes the basis for future research in this area of business.
topic Working Capital Management
Profitability
Textile Sector
url http://www.isarder.org/isardercom/2013vol5issue2/vol.5_issue.2_article02fulltext.pdf
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AT bilal impactofworkingcapitalmanagementonprofitabilityoftextilesectorofpakistan
AT javariakhan impactofworkingcapitalmanagementonprofitabilityoftextilesectorofpakistan
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