Factors Influencing the Profitability of Heavy Vehicle Industry: A Case of Pakistan

Muhammad Aqil, Rizwan Raheem Ahmed, Jolita Vveinhardt and Dalia Streimikiene

Montenegrin Journal of Economics, 2019, vol. 15, issue 1, 61-72

Abstract: The purpose of this study is to explore the influence of working capital management on the profitability of the heavy vehicle industry in Pakistan from 2005 to 2017. For this purpose, five firms were selected. There were six independent variables that included average account payable, cash conversion cycle, accounts receivable turnover, inventory turnover, and quick ratio. The size of business was used as the control variable. The dependent variables were rerun on assets and return on equity. The Panel least squares regression (PLSR) was employed to examine the relationships amongst the variables. The results revealed that most of the elements of working capital have a significant effect on return on equity and return on assets. However, the size of the business had an insignificant impact on profitability. This research study has provided basic foils to the future research studies, and guidelines to the financial managers of heavy vehicle industry that how to manage their financial portfolios for optimum profitability.

Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:mje:mjejnl:v:15:y:2019:i:1:p61-72

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