Article2016

Impact of Liquidity Management on Profitability of Pakistani Firms: A Case of KSE-100 Index

47 citations0/0 files storedInternational journal of innovation and applied studies

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Working Capital and Financial Performance Financial Analysis and Corporate Governance Supply Chain and Inventory Management

Abstract

The global financial crisis of 2007-08 has reverted the mounting importance of liquidity and profitability as a key concern in today's competitive business environment to generate funds internally. This study has examined the impact of the liquidity management on the performance of the 64 Pakistani non-financial companies constituting Karachi Stock Exchange (KSE) 100 Index for the period of 2006-2011. To derive the results of the study; descriptive statistical analysis, correlation analysis and multivariate regression tools of analysis were applied. According to the results of analyses, it is found that liquidity variables current ratio and the cash conversion cycle have significant positive impact on profitability (ROA). Further, results indicate that high current ratio and longer cash conversion cycle lead firms towards better performance. This study suggested firms to relax their credit sales policies, and devise inventory and collection turnover system in a wise manner to be more accessible to a large number of customers.

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1947The Creative Response in Economic History 2004Why Do Firms Hold Cash? Evidence from EMU Countries 2006TRENDS IN WORKING CAPITAL MANAGEMENT AND ITS IMPACT ON FIRMS, PERFORMANCE: AN ANALYSIS OF MAURITIAN SMALL MANUFACTURING FIRMS 2008Trade-Off and Pecking Order Theories of Debt**We thank Long Chen, Sudipto Dasgupta, Espen Eckbo, Chris Hennessy, Jay Ritter, Michael Roberts, Tan Wang, and Jaime Zender for comments and helpful discussions. Murray Frank thanks Piper Jaffray for financial support. Vidhan Goyal thanks the Research Grants Council of the Hong Kong Special Administrative Region for financial support (Project No. 6489/06H). The literature on capital structure is vast, containing hundreds of papers, and so we cannot hope to cover it all. Inevitably, we have left out a great deal, much of it very important. As such, we apologize in advance for our inevitable oversights. Even more than usual, it must be stressed that this survey reflects only our views.2007Prophet of innovation: Joseph Schumpeter and creative destruction 2017Schumpeter, Joseph Alois, 1939, Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process, New York and London, McGraw – Hill Book Company Inc 2013Working Capital Management and Firm Profitability : Empirical Evidence from Manufacturing and Construction Firms Listed on Nairobi S ecurities Exchange, Kenya 2012Liquidity Management and Corporate Profitability: Case Study of Selected Manufacturing Companies Listed on the Nigerian Stock Exchange

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2017EFEK MODERASI KEBIJAKAN DIVIDEN DALAM PENGARUH PROFITABILITAS TERHADAP NILAI PERUSAHAAN

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