1-Annotated Bibliography

impact of Cash Conversion Cycle on Profitability of Sugar Sector in Pakistan

Reference

Jamal, S., Waseem, S. N., and Khan, S. (2014). Impact of Cash

Conversion Cycle on Profitability of Sugar Sector in Pakistan. Asian
Journal of Research in Banking and Finance, 4(3), 59-69.

Aim/Purpose

The aim of this research is to analyze the elements which influence the
firms profitability. Cash conversion cycle management is very
important tool to manage liquidity position of any organization, this
study attempts to study its impact on firms profit by different
Statistical tests.
H1: There is a significant relationship between efficient Cash
Conversion Cycle management and profitability of sugar
companies in Pakistan.
H2: There is a significant relationship between Receivables and
profitability of sugar companies in Pakistan.
H3: There is a significant relationship between Trade Creditors and
profitability of sugar companies in Pakistan.
H4: There is a significant impact of Inventory Cost on profitability of
sugar companies in Pakistan.
H5: There is a significant relationship between Size of Companies and
profitability of sugar sector of Pakistan.
H6: There is a significant relationship between Cost of Production and
profitability of sugar companies in Pakistan.
H7: There is a significant relationship between Interest Expense and
profitability of sugar companies in Pakistan.
Dependent variable
Net income
Independent variables
Cash conversion cycle, inventory, customer receivable, capital, trade
creditors, cost of goods sold and financial expense.

Research
Question/hypothesis

Important Theme

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Method/Approaches

Findings/Conclusion

Paradigm: positivism approach used.

The research is a descriptive study and the researcher randomly
selected 36 companies out of 81 companies at present, which is 44% of
total population. The type of investigation is correlation (NonDirectional) and Non-Contrived study setting. This Study is based on
Secondary Data and Linear Regression Model has been used for
research purpose.
Result found that all the variables has significant effects on the
profitability of the sugar industry of Pakistan and the relationship of
Cash Conversion Cycle, Trade Receivable, Inventory, Customer
receivables, CGS, Financial expenses and Trade Payable with the
profitability of firm is negative because big Cash Conversion Cycle
shows the maximum collection days, large inventory cost and
minimum payment period which are directed effect on the financing of
the firm and push to borrow loan which increase the financing cost of
the firm and decrease the profit of the firm.
The relationship between the size of the firm (Capital) and profitability
of sugar industry of Pakistan shows the positive impact on the
profitability of sugar sector as the industry mostly has its own
resources i.e. equity.

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