Impact of Working Capital Management on Profitability of Chemical Sector of Pakistan

Hamza Aslam Butt
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Hamza Aslam Butt: COMSATS Institute of Information Technology Lahore, Pakistan

International Journal of Social Sciences and Management Studies (IJSSMS), 2014, vol. 1, issue 2, 67-79

Abstract: Working capital management plays a significant role in any corporation. The survival of any business is only possible if the current portion of its balance sheet is working well. To measure the profitability return on assets is used while current assets to total asset ratio is included to measure the investing policy and current liabilities to total asset ratio is used for financing policy. The other indicators involved in this study are debt to equity ratio as a measure of leverage and log of sales to measure the size of the firm. Five years data of chemical sector from 2006 to 2010 is analyzed. Through regression analysis it is discovered that aggressiveness of the working capital policy is negatively related with the profitability. The chemical sector is one of the vital sectors of Pakistan. So, this study aims to make available some beneficial suggestions for the people who are accountable for the management of this sector.

Keywords: Profitability; Working Capital Management chemical industry (search for similar items in EconPapers)
Date: 2014
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