his study is conducted to identify the direction of the relationship between working capital
management (WCM) and firm performance of the non-financial sector of Pakistan from 2009
till 2018. This has also looked at the effect of restricted access to loan on the WCM- Profitability relationship.
The findings confirmed that restricted loan accessibility impacts the WCM-Profitability relationship. The
comparative analysis demonstrated that financially constrained firms are mostly non-family firms that are new,
growing, smaller in size, face high risk, maintain high liquidity and tangibility ratios than non-constrained firms.
Further, the working capital levels of financially constraint firms is lower because of high operating expenses
and greater capital rationing. Managers and scholars may use these findings for the administration of their
working capital policies in order to avoid the financial cost and create more opportunities for financial
accessibility which is further beneficial for making informed investment decisions, yielding higher profits that
contribute towards sustainable growth.
Kanwal Iqbal Khan
Assistant Professor, Institute of Business & Management, University of Engineering and Technology, Lahore, Punjab, Pakistan.
Assistant Professor, Department of Management Sciences, Lahore College for Women University, Jail Road , Lahore, Punjab, Pakistan.
Assistant Professor, Department of Management Sciences, Shaheed Benazir Bhutto University, Shaheed Benazirabad, Karachi, Pakistan.
Financial Constraints, Working Capital Management, Firm Profitability, Investment Decisions, Loan Accessibility, Family Firms, Sustainable Growth