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The Impact of CCC and WC on The Profitability of KMI-30 INDEX

Author

Listed:
  • Riaz, Samina
  • Iqbal, Athar
  • Khan, Muhammad Irfan

Abstract

This research purpose is to investigate the impact of WC and CCC on prosperity of the companies, listed in KMI-30 Index. For this research data was gathered from firm’s annual reports. Data of 30companies listed in KMI-30 Index was collected over the period of 2010 till 2014. Data was collected to check significance of ROE, Tobins’Q, and ROA. To analyze these variables regression analysis was used to measure the impact on dependent variable through independent variables. The study concluded that cash conversion cycle and debt to assets ratio were most significant variable on the dependent variables i.e. ROA, Tobins’Q and ROE. It was recommended to the companies of listed in the KMI-30 to maintain the CCC at their minimum level or in lines with the industry norms, so they can avoid the liquidity problem along with the reduce the shortfall of cash requirement which were needed to smoothly run the operations of the companies.

Suggested Citation

  • Riaz, Samina & Iqbal, Athar & Khan, Muhammad Irfan, 2019. "The Impact of CCC and WC on The Profitability of KMI-30 INDEX," MPRA Paper 103036, University Library of Munich, Germany, revised 30 Dec 2019.
    • Handle: RePEc:pra:mprapa:103036
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    References listed on IDEAS

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    4. Haitham Nobanee & Modar Abdullatif & Maryam AlHajjar, 2011. "Cash conversion cycle and firm's performance of Japanese firms," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 19(2), pages 147-156, July.
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    More about this item

    Keywords

    KMI-30; Tobin’s Q; ROA; ROE; WC; CCC;
    All these keywords.

    JEL classification:

    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G3 - Financial Economics - - Corporate Finance and Governance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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