Abstract
Textile sector is considered as the backbone of Pakistani economy. The
profitability and sustainability of the textile sector is very important for the
economic growth of Pakistan. Working capital has a major role in the
performance of any business entity. In this article the authors have tried to find
out the impact of working capital management on the performance of textile
sector companies. For the above said purpose, the data of 30 textile sector
companies listed at Karachi Stock Exchange having maximum market share
were analyzed. All the manufacturing firms generally face problems with their
collection and payments schedule. The results have indicated that sales
growth, receivables turnover, payables turnover, inventory turnover, gross
working capital turnover, current assets turnover, and financial debt ratio have
a significant impact on the profitability of the textile companies of Pakistan.
The study also concludes that firms in Pakistan are following conservative
working capital management policy due to shortage of funds; thus, the firms
need to concentrate on the collection policies. There is a great need for the
efficient policies for the management of working capital. Furthermore, the
efficient management and least cost financing can increase the profitability of
textile companies.
MUZAFFAR ASAD. (2012) WORKING CAPITAL MANAGEMENT AND CORPORATE PERFORMANCE OF TEXTILE SECTOR IN PAKISTAN, Paradigms , Vol 6 , Issue 1.
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