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The determinants of working capital management and firms performance of textile sector in Pakistan

The aim of this study is to determine the relationship of working capital management and the firm’s profitability in the textile sector of Pakistan. A sample of 127 textile firms listed in the Karachi stock exchange for the period 2001–2012 are used in the study. The study uses the dynamic panel gen...

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Main Authors: Tahir, M., Anuar, M. B. A.
Format: Article
Published: Springer Netherlands 2016
Subjects:
HD28 Management. Industrial Management
Online Access:http://eprints.utm.my/id/eprint/73800/
https://www.scopus.com/inward/record.uri?eid=2-s2.0-84957959034&doi=10.1007%2fs11135-015-0166-4&partnerID=40&md5=cc07768997ebb41f2887841552a302ac
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spelling my.utm.738002017-11-18T07:19:26Z http://eprints.utm.my/id/eprint/73800/ The determinants of working capital management and firms performance of textile sector in Pakistan Tahir, M. Anuar, M. B. A. HD28 Management. Industrial Management The aim of this study is to determine the relationship of working capital management and the firm’s profitability in the textile sector of Pakistan. A sample of 127 textile firms listed in the Karachi stock exchange for the period 2001–2012 are used in the study. The study uses the dynamic panel generalized method of moments to analyze the data. The findings revealed that average collection period in days, net working capital level, current assets to operating income, current assets to sales ratio, current liabilities to total assets has negative impact on return on assets, whereas the accounts payable period in days, inventory turnover in days, cash conversion cycle, net trade cycle, cash turnover ratio, current assets to total assets ratio, and current ratio has a positive association with profitability. In case of the control variables, sales growth and firm size have positive associations with profitability, while financial debt ratio, gross domestic product, inflation and interest depicted negative results. The findings highlight the significance of the working capital components with profitability in the textile sector of Pakistan and recommends that by designing and implementing effective policies on working capital, the firm’s profitability can be enhanced. Springer Netherlands 2016 Article PeerReviewed Tahir, M. and Anuar, M. B. A. (2016) The determinants of working capital management and firms performance of textile sector in Pakistan. Quality and Quantity, 50 (2). pp. 605-618. ISSN 0033-5177 https://www.scopus.com/inward/record.uri?eid=2-s2.0-84957959034&doi=10.1007%2fs11135-015-0166-4&partnerID=40&md5=cc07768997ebb41f2887841552a302ac
institution Universiti Teknologi Malaysia
building UTM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Malaysia
content_source UTM Institutional Repository
url_provider http://eprints.utm.my/
topic HD28 Management. Industrial Management
spellingShingle HD28 Management. Industrial Management
Tahir, M.
Anuar, M. B. A.
The determinants of working capital management and firms performance of textile sector in Pakistan
description The aim of this study is to determine the relationship of working capital management and the firm’s profitability in the textile sector of Pakistan. A sample of 127 textile firms listed in the Karachi stock exchange for the period 2001–2012 are used in the study. The study uses the dynamic panel generalized method of moments to analyze the data. The findings revealed that average collection period in days, net working capital level, current assets to operating income, current assets to sales ratio, current liabilities to total assets has negative impact on return on assets, whereas the accounts payable period in days, inventory turnover in days, cash conversion cycle, net trade cycle, cash turnover ratio, current assets to total assets ratio, and current ratio has a positive association with profitability. In case of the control variables, sales growth and firm size have positive associations with profitability, while financial debt ratio, gross domestic product, inflation and interest depicted negative results. The findings highlight the significance of the working capital components with profitability in the textile sector of Pakistan and recommends that by designing and implementing effective policies on working capital, the firm’s profitability can be enhanced.
format Article
author Tahir, M.
Anuar, M. B. A.
author_facet Tahir, M.
Anuar, M. B. A.
author_sort Tahir, M.
title The determinants of working capital management and firms performance of textile sector in Pakistan
title_short The determinants of working capital management and firms performance of textile sector in Pakistan
title_full The determinants of working capital management and firms performance of textile sector in Pakistan
title_fullStr The determinants of working capital management and firms performance of textile sector in Pakistan
title_full_unstemmed The determinants of working capital management and firms performance of textile sector in Pakistan
title_sort determinants of working capital management and firms performance of textile sector in pakistan
publisher Springer Netherlands
publishDate 2016
url http://eprints.utm.my/id/eprint/73800/
https://www.scopus.com/inward/record.uri?eid=2-s2.0-84957959034&doi=10.1007%2fs11135-015-0166-4&partnerID=40&md5=cc07768997ebb41f2887841552a302ac
_version_ 1643656751496560640
score 13.244367

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