IMPACT OF WORKING CAPITAL MANAGEMENT ON FIRM’S PROFITABILITY (A CASE OF TELECOM SECTOR IN PAKISTAN)

This study evaluated the effect of working capital management on the profitability of the Telecom Sector in Pakistan. It examined the influence of the average receivable collection period (ACP), inventory conversion period (ICP), average payment period (APP) and cash conversion cycle (CCC) on the profitability of the aforementioned firms with 5 year's data (2013-2017). This study deals with the performance of the Telecom Sector companies working in Pakistan with respect to its working capital management on profitability. The main goal of this study is to examine the relationship between the core components of working capital management with the profitability of the Telecom Sector in Pakistan. The result of the regression model identified that the average receivable collection period (ACP) and Inventory conversion period (ICP) to be the significant factors followed by the average payment period (APP) and cash conversion cycle (CCC). The result of the current study found that there is a negative and significant relationship between working capital management and the firm's profitability. It is concluded that the profitability of these telecom organizations is greatly influenced by the average receivable collection period (ACP), inventory conversion period (ICP), average payment period (APP), and cash conversion cycle (CCC).