Author (s)

Andre Guimaraes, Valcemiro Nossa

T. Chandrabai, Dr. K. Venkata Janardhan Rao

Rimsha Khalid, Tehreen Saif, Abdul Rehman Gondal, Hamza Sarfaraz

Abdullahi Hassan Gorondutse, Ahmed Abubakar

Asif Iqbal

Nufazil Altaf, Farooq Ahmad Shah

Gbalam Eze

Nasser Alsulayhim

Bojana Vuković1, Dejan Jakšić

Amr Ahmed Moussa

Ha Thi Thuy Van; Dang; Ngoc Hung; Vu Thi Thuy Van; Ngo Thanh Xuan

M. Eswarareddy

Mr. Shivakumar 1, Dr. N Babitha Thimmaiah

Mr.V.VENKATACHALAM

Richard Kofi Akoto1, Dadson Awunyo-Vitor2* and Peter Lawer Angmor3

Dr. Yellaswamy Ambati

Jyoti Mahato1 and Uday Kumar Jagannathan2

Shailendra Saxena

Poonam Rani, Dr. Pradeep Kumar Aggarwal

Abhijit Mitra

Andras Farkas

Somaya Jalal Al-Herwi

Vikas Shrotriya

Dr.P.Chellasamy1, Ligy V.K.

Pinku Paul, Paroma mitra

Paresh shah

Nadeem Iqbal, Naveed Ahmad

 Industry

Healthcare Insurance

Cement Industry

Electrical Equipment

SMEs

Manufacturing Industry

Non-financial Companies from 11 Industries (Chemical and Chemical

products, Consumer Goods, Construction and real estate, Communication
services, Food and Dairy products, Information technology, Machinery,
Metal and Metal products, Transport equipment, Textile and Wholesale and
retail trading).

Insurance

Set of Non-Financial companies listed in Saudi Arabia Stock Exchange

Food Industry

68 Industrial firms listed on the EGX 100 index, which represents the 100
most actively traded firms on the Egyptian Stock Exchange. All financial and
service institutions were excluded from the sample because of the unique
nature of the WCM.
Non-Financial Companies( RE and Constructions; Technology; Industrial;
Services; Consumer Goods; Energy; Agriculture; Raw Materials; Health)

AUTOMOBILE INDUSTRY

MINING & METALS

AUTOMOTIVE

MANUFACTURING INDUSTRY

PAPER & FOREST PRODUCT

TELECOM INDUSTRY

FLAT GLASS INDUSTRIES

MINING INDUSTRY

Power sector

Process industry

_
Manufacturing Industry

Automobile sector

Steel industry

Pharmaceutical sector

Manufacturing industry
 Need

To find relation between different capital structure under Fleuriet model and
profitability, solvency and liquidity of health insurance companies.

To study and evaluate the WCM in ACC Limited and also to find relationship
between WCM and Profitability.

To examine whether efficient WCM can impact profitability of firms of electrical

and machinery equipment sector of Pakistan.

To study the impact of WCM on Malaysian SME's Profitability within the sight of
control factors measured by the size of the firm, leverage and sales growth.

To analyze the effect of working capital

management on profitability, in detail, in the manufacturing firms of Pakistan
listed on Karachi Stock Exchange.

To examine the relationship between WCM and firm profitability.

To examines the relationship between working capital management and firm

performance in
Nigeria.

To investigate relationship between WCM and Profitability of non-financial firms

listed in Saudi Stock Exchange.

To examine the effect of WCM on company’s profitability in the food industry in

Southeast Europe using components of WC.

To study was to explore the impact of working capital management (WCM) on

firms’ performance and value for a sample of Egyptian firms.
To examine the impact of WCM on corporate performance (CP) in Vietnam.

In order to enhance the liquidity and profitability position to the greater

This paper contribute
level,ineffective managementthat byof reducing
workingthe number
capital of days
as one formajor
of the accounts
causereceivable
of
sickness,
This studysome
attempts
ratiosto related
fill thistogap
debtors
by usingandpanel
working
datacapital
methodology
turnovertoneed to be
effective. the effects of WCM practices on the profitability of listed
investigate
manufacturing and find that accounts receivable days significantly negatively
The importance
influence of theitstudy
profitability means is that in order
reduce to face severe
their average competition
collection andcash
period, and to
increase its cycle
conversion profit,(CCC)
it is significantly
also essentialpositively
to buy more shares
affects meansfor M&M.
short CCC is ideal for
enhancing profitability and creating value for shareholders, current asset is also
significant and positively impact profitability because it should keep enough
current assets to of
The contribution match their current
the study liabilities
is to avoid heavy fluctuations in quantum of
working capital as a relation to sales, as there is always a time gap between the
sale of goods and receipt of cash, so that the current assets are to be maintained
at
Theoptimum level.
The liquidity position
contribution of theis not
studyimprove
showsthrough
that ROA Average Current
has negative ratio and liquid
relationship with
ratio, also low inventory ratio may reflect that the company
ACP, ICP, CCC and Current ratio & ROA has positive relationship with are not able
APP,to
Firm
manage
size and their inventory and Average low debtors turnover ratio is indicative of
debt ratio
shorter timing between sales and cash collection, a Average low ratio shows that
debts are not
The study collected
contribute rapidly.
that Hence to improve
the company’s earningsits
areneeds improve
increasing in Average
every year but
collection period.
the company’s funds are not properly utilized because two ratios working
capital turnover ratio and inventory management on the one hand it increase
current assets which leads to increases company’s solvency but on the other
hand, it also decreases its profitability.

Working capital management plays a pivotal role as it directly affects the liquidity
and profitability of the firm. It deals with the management of current liabilities.

To measure a company's liquidity and reflect how well a firm is capable

of managing its vendor and customer relationships.

working capital management,or operating liquidity, has always been crucial to the l
Inadequate level of working capital would ressult in issues like disturbance in
production, non availability of finished goods for sale, non availability of cash for
honouring payable,may even pressurize the organization to carry on business on
cash basis only and the opportunity of credit business may be lost. This would
directly affect the sales of the company and the profit. If working capital
components are held in abundance, there would be possibility of misuse of
material, there would be misuse of cash
even and delays in the collection of receivables. Hence, an optimum level of wc
should be maintained.

working capital management implies management in determining the required

amount, economical procurement and efficiency in utilization of these current
assets. The solvency of a firm largely depends upon the optimum use of the
components of current assets.

Working capital is required to

run the wheels of the business. Working capital management objective is to
maximise the
profits, which results into reducing the risk of not able to satisfy the maturing
short-term debt.

Determining the appropriate levels of working capital

involves fundamental decisions with regard to the firm’s
liquidity and trade-offs between risk and profitability.

Working capital management is an important element because it directly influences

 Importance
It helps to compare different types and sub-types of capital structure in details
comensurating with its efficiency in terms of profitability and refine and develop a
insolvency prediction model.

Analyzes various aspect of Working Capital to optimize Firm's Investment.

There is no research work to study the relation between WCM and Profitability in
Electricals and Equipment sector of KSE, despite WCM being emperically important
factor of Firm's Profitability. This study fills the gap of existing literature.

This research work uses ROA, NOP and ROE as dependent variable; and Inventory
Turnover in Days(ITID), Days Accounts Payables(DAP) and Cash Conversion Cycle
(CCC) as independent variable.

Existing literature cannot solve the the conflict as to the relation between WCM
and Profitability factors is positive or negative. This study solves the conflict by
conducting the research on individual WCM components and Profitability variables.

Studies the relation of WCM and profitability based on firm's investment strategy
in WC.

This study has revealed the effect of management of each of the components of
working capital in some selected industrial firms in Nigeria.

Unlike previous literatures this study finds that relation between WCM and
Profitability is independent of Country's Economy.

The food industy in Southeast Europe is characterized by high rate of indebtedness

and loans with extremely high-interest rates and other unfavorable conditions. This
study is one of its kind in this sector.

This research studies the relation of CCC and ROA employing a set of control
variables to control for differences in firm characteristics, industry type, and
economic conditions.
This study fully and comprehensively examines the impact of working capital
management through CCC and NTC on corporate performance. This study was
carried out by collecting data from listed companies on Vietnam's stock market,
which is an emerging economy that can demonstrate the optimal threshold of both
CCC and NTC’s impact on CP.

To find a negative and positive relationship between accounts receivables and

corporate profitability and between accounts payable and profitability.

Needimprovrment in ratios related to debtors and working capital turnover.

Need to analyzing whether the companies are viable in the long run through the
ratio analysis

Need is to investigate the effects of WCM on the profitability of listed

manufacturing firm.

The need of the study is how firm has to invest enough funds in current assets
which cannot be converted in to cash instantaneously,
The need of the study is to provide adequate support for smooth and efficient
functioning of day to day business operations by striking a trade between the three
proportions of working capital.

The need is to know the financial aspects of Flat glass Industries

The need of the study is to look into the suitable working capital policy for the
firm.
working capital management is a lifeline for distressed companies. Without
increasing sales or cutting costs,firm can generate revenue just by reducing its net
working capital cycle.

Adequate levels of Working Capital ignores financial risks. Adequate level of the
current
assets ignores the high level of inventory which involves large amount of carrying
costs but at
the same time it makes possible for the firm to keep wide range of goods to sell,
and thus, generate higher sales and profits. The liquidity risk diminishes with
an increasing level of Working Capital.

Prioritizing working capital allows companies to make strategic investments, which

in turn drive operational efficiencies and
reduce overhead. Having negative cash can spook investors and shareholders and
result in undervaluation of the
company.
Optimum level of current assets would lead to a controlled level of cost of funds as w

A firm’s profitability and liquidity are determined in part by the way its working
finance is managed. Efficient
management of working capital is one of the pre-conditions for the success of a
firm.

The working capital management is considered to be a vital

issue in liquidity and short-term investment decision of the
firm. It has an effect on liquidity as well as on profitability
of the firm. The efficacy of working
capital management depends on the balance between
liquidity and profitability. The value of the firm is being created by optimal
working capital management.

Liquidity measures the ability of a firm to honour all the obligations on

due date. No firm can endure without liquidity. Profitability is
the rate of return on company’s investment. An unwarranted
high investment in current assets would reduce this rate of
return.

The current assets of a distinctive manufacturing firm accounts for over

half of its total assets. Too many levels of current assets can easily result in a firm’s
realizing an inferior return on
investment. However firms with too few current assets may incur shortages and
difficulties in
maintaining smooth operations. Efficient working capital management involves
planning and controlling current assets and current liabilities in a
manner that eliminates the risk of inability to meet due short term obligations on
the one hand
and avoid excessive investment in these assets on the other hand.
 Contribution

certain structure – where financial current assets exceed onerous current liabilities,
and cyclical current assets exceed cyclical current liabilities – is associated with
higher levels of profitability, liquidity and solvency.
ACP is negatively correlated with all the profitability ratios except with ITR. ITR is
positively correlated with ROE.

There is a statistically significant positive relation among WC (ITR, CR, D/E ratio,
OCF/Debt ratio) and ROA.

There is lack or limited access of funds in SMEs sector, this research via establishing
relationship between components of WC and Profitability iin detail facilitates better
management of WCM and lowers the need of fund.

Through Correlation Analysis it was found that CR, QR and NOP are positively
correlated while CCC and NOP are negatively correlated. Regression Analysis
establishes a negative relation between CCC & NOP and APP & NOP.

Unlike prior studies that found a linear relationship between WCM and firm
profitability. This study provides newer evidence for an inverted U-shaped relation
between investment in WC and firm profitability in India. In addition, this study uses
GMM to control the potential problems of endogeneity.

The output of the study is contribution to literature as well as reveals that free cash
flow should be gainfully invested to avoid operational deficiencies.

The result shows statistically significant relation between WCM and Profitability
whereas it indicates that there is no single practice or WCM strategy that suits every
company.

Current liquidity and Current liability to total asset ratio has statistically significant
negative relation with ROA. This finding will help managers to maintain optimal level
of WC and to use profitable investments, promptly and appropriately
react to market fluctuations and gain competitive advantages for the companies in
the
food industry.

The study finds a positive relation between CCC nad firm's performance & firm's
value. A new insight contends that stock markets in less developed economies such
as Egypt fail to penalize managers for inefficient WCM. Therefore, policy-makers in
Egypt need to improve the awareness of managers and shareholders regarding the
usefulness of WCM.
The study finds a inverted U-shaped relation between WCM and company's
performance. The result is useful in maintaining optimal level of WC and to utilize
investment opportunities in order to maximize firm's profit and shareholder's value.

If the firms properly manage their cash, accounts receivables, accounts payable and
inventories in proper way, this will ultimately increase profitability of these
companies.

To examine the liquidity position of Coal India Ltd.

imporatnce of the study is to suggest, find, and identify the financing working
capital, overcome the obstacle in the company.

The importance is to maintain efficient WCM in creating value for shareholders.

The importance is to know the liquidity position of the firm in order to examine its
ability to meeting current obligations.
The importance is infer on the relationship between working capital management
and profitability in the Indian telecom sector.
The importance is how to manage their inventory and analyze the components
performance appraisal of working capital

Importance is to determine the amount of the working capital employed by the

company,concept and analyse the working capital performance

working capital management helps in value creation, stability and flexibility.

The Working Capital management is responsible for the commercial and financial
aspects of inventory, credit, and purchasing policy.

Working capital is interest-free and comes with no conditions, making

it the cheapest and fastest source of cash for a company. Net Working Capital is for
maintaining a
position of liquidity and gives the creditor a clear picture of
financial soundness of the business. Positive NWC shows profitable and
efficient businesses, it help investor to judge whether to invest or not .WC is
measurement of financial company strength. And by managing NWC one can
maximize
proceeds on a sale.
Optimum inventories ensure that the cost of purchasing
inventory, the cost of placing orders and the cost of carrying inventory are at the
minimum. Optimum wc ensures the return on investment on the amount locked as
working capital to remain at moderate level due to total lower cost on lower
amount of funds involved. Every time the company does not have to run for
arrangement of funds for working capital. It creates a positive image of the
company in the eyes of the employees, creditors, debtors, bankers and
other related parties like distributors etc.

Efficient management of working capital ensures an adequate amount of working

capital maintained for smooth
running of a firm and for fulfillment of twin objectives of liquidity and profitability.

A firm’s high liquidity risk results in high profitability. By efficient use of working
capital a
firm can invest more in the productive purpose and focus
on the credit sales of the company which in turn increases
the profitability of the company. The investment in the
liquid assets of the firm has a positive impact on the profitability of the firm.

Optimal level of working capital maximizes firm's value. Adequate profit indicates
firm's long life whereas adequate liquidity prevents bankruptcy as well as
insolvency. operating cycle period should be given more importance than the
current ratio and
quick ratio, as a measure and its impact on profitability. Loan payable capacity of
the firm is the another factor to be taken care of as the size
of the variable has significant effect on the profitability of
the firm.

A longer cash conversion cycle, a measure of working capital management, might

increase profitability because it leads to higher sales.
However, corporate profitability might also decrease with the cash conversion cycle,
if the
costs of higher investment in working capital rise faster than the benefits of holding
more
inventories and/or granting more trade credit to customers. It requires constant
supervising to
maintain proper intensity in various components of working capital i.e. cash
receivables,
inventory and payables etc.