Impact of Working Capital Management on Firm’s Profitability: Evidence from Cement Sector of Pakistan

Abstract

Finance is a great need in the establishment of businesses either it is a small business unit or a vast assembling concern. Money is the main regular component in all little and substantial specialties units.  Along these lines cash administration is must that is by and large known as money related administration. Financial management can only be possible if one can put proper administration of money that business brings about compelling monetary administration. There are two basic purposes of having monetary funds(I) for foundation and (II) to meetsits everyday expenses. As we all know that for the purchase of capital asset huge amount of finance is required in order to increase production, for example, plant and apparatus, land and building, furniture and so forth furthermore for extension of business, remodel or redesigning of plant and apparatus and innovative work. The part of association's capital which is obstructed on a perpetual premise is called altered capital. In the same way funds are required for transient purposes e.g., for the buy of crude materials, installment of wages and for gathering ordinary costs. All the merchandise which are delivered in a given time period may not be sold in that period. Subsequently, a few products stay in stock, e.g. crude material; semi completed merchandise and completed products, management of these assets is called working capital management. In straightforward words working capital administration alludes to all parts of current assets and current liabilities. The administration of a working capital is of incredible essentialness at least the vitality of administration of altered capital.