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EXAMINING THE IMPACT OF WORKING CAPITAL MANAGEMENT APPROACHES ON FINANCIAL PERFORMANCE IN THE TEXTILE SECTOR OF PAKISTAN

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51 Pages : 551-563

http://dx.doi.org/10.31703/gssr.2023(VIII-I).51      10.31703/gssr.2023(VIII-I).51      Published : Mar 1

Examining the Impact of Working Capital Management Approaches on Financial Performance in the Textile Sector of Pakistan

Abstract

    Efficient management of operational funds holds immense importance for enterprises. The calculation of net working capital, achieved by subtracting current liabilities from assets, carries significant weight. Aspects such as durations for collecting and disbursing funds, the rate of inventory rotation, the transformation of cash, and the cycle of trade play a pivotal role in determining the level of profitability. This research undertook an evaluation of their influence on the profitability of Pakistan's textile industry, utilizing data from 10 publicly listed companies and subjecting them to thorough panel regression analysis. The findings brought to light that the Average Collection Period (ACP) exhibited an inconsequential and adverse impact on Net Operating Profit (NOP). Conversely, the Average Payment Period (APP) demonstrated a substantial reduction in NOP. While Inventory Turnover (ITID) displayed an insignificant amplification in NOP, Cash Conversion Cycle (CCC) exhibited a positive correlation with the firm's financial performance in distinction to Net Trading Cycle (NTC) yielded a detrimental effect.

    Net Trading Cycle, Cash Conversion Cycle, Average Collection Duration, Net Operating Profit Margin, Days Sales of Inventory, Net Current Capital

    (1) Muhammad Yousif
    PhD Scholar, Department of Business Administration, Ghazi University, Dera Ghazi Khan, Punjab, Pakistan.
    (2) Muhammad Ziaullah
    Associate Professor, Department of Business Administration, Ghazi University, Dera Ghazi Khan, Punjab, Pakistan.
    (3) Muhammad Zulqarnain Jatoi
    PhD scholar, Department of Business Administration, Khawaja Fareed University of Engineering and Information Technology, Rahim Yar Khan, Sindh, Pakistan.
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Cite this article

APA

    APA : Yousif, M., Ziaullah, M., & Jatoi, M. Z. (2023). Examining the Impact of Working Capital Management Approaches on Financial Performance in the Textile Sector of Pakistan. Global Social Sciences Review, VIII(I), 551-563. https://doi.org/10.31703/gssr.2023(VIII-I).51

CHICAGO

    CHICAGO : Yousif, Muhammad, Muhammad Ziaullah, and Muhammad Zulqarnain Jatoi. 2023. "Examining the Impact of Working Capital Management Approaches on Financial Performance in the Textile Sector of Pakistan." Global Social Sciences Review, VIII (I): 551-563 doi: 10.31703/gssr.2023(VIII-I).51

HARVARD

    HARVARD : YOUSIF, M., ZIAULLAH, M. & JATOI, M. Z. 2023. Examining the Impact of Working Capital Management Approaches on Financial Performance in the Textile Sector of Pakistan. Global Social Sciences Review, VIII, 551-563.

MHRA

    MHRA : Yousif, Muhammad, Muhammad Ziaullah, and Muhammad Zulqarnain Jatoi. 2023. "Examining the Impact of Working Capital Management Approaches on Financial Performance in the Textile Sector of Pakistan." Global Social Sciences Review, VIII: 551-563

MLA

    MLA : Yousif, Muhammad, Muhammad Ziaullah, and Muhammad Zulqarnain Jatoi. "Examining the Impact of Working Capital Management Approaches on Financial Performance in the Textile Sector of Pakistan." Global Social Sciences Review, VIII.I (2023): 551-563 Print.

OXFORD

    OXFORD : Yousif, Muhammad, Ziaullah, Muhammad, and Jatoi, Muhammad Zulqarnain (2023), "Examining the Impact of Working Capital Management Approaches on Financial Performance in the Textile Sector of Pakistan", Global Social Sciences Review, VIII (I), 551-563

TURABIAN

    TURABIAN : Yousif, Muhammad, Muhammad Ziaullah, and Muhammad Zulqarnain Jatoi. "Examining the Impact of Working Capital Management Approaches on Financial Performance in the Textile Sector of Pakistan." Global Social Sciences Review VIII, no. I (2023): 551-563. https://doi.org/10.31703/gssr.2023(VIII-I).51