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Affect of Working Capital Management on Firms Profitability in Sugar Industry of Pakistan


  • Malik, Zafar Ullah
  • Iqbal, Athar


Management of working capital performs a very vital part in the performance of firms in sugar industry. This thesis tests the impact of working capital management on firm’s profitability in sugar industry of Pakistan for years 1999 to 2009. To analyze this, data of 19 sugar mills which are listed at Karachi Stock Exchange is used. The result shows that the Sales Growth, Current Ratio, No of Days Inventory and No of Days Accounts Payables are significantly affecting the profitability of the firms while Sales, Gearing Ratio and No of Days Account Receivables are insignificant in the research. Pearson Correlation and Multiple Linear Regression are used in this research to study the relationship between variables.

Suggested Citation

  • Malik, Zafar Ullah & Iqbal, Athar, 2012. "Affect of Working Capital Management on Firms Profitability in Sugar Industry of Pakistan," MPRA Paper 41436, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:41436

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    References listed on IDEAS

    1. Petersen, Mitchell A & Rajan, Raghuram G, 1997. "Trade Credit: Theories and Evidence," Review of Financial Studies, Society for Financial Studies, vol. 10(3), pages 661-691.
    2. Alan S. Blinder & Louis J. Maccini, 1991. "Taking Stock: A Critical Assessment of Recent Research on Inventories," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 73-96, Winter.
    3. Ding, Sai & Guariglia, Alessandra & Knight, John, 2013. "Investment and financing constraints in China: Does working capital management make a difference?," Journal of Banking & Finance, Elsevier, vol. 37(5), pages 1490-1507.
    4. Wang, Yung-Jang, 2002. "Liquidity management, operating performance, and corporate value: evidence from Japan and Taiwan," Journal of Multinational Financial Management, Elsevier, vol. 12(2), pages 159-169, April.
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    More about this item


    WCM; Working Capital Management; Sugar; Payable cycle; Receivable Cycle;

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance

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