IMPORTANCE OF CASH THE IMPACT OF CASH CONVERSION CYCLE ON PROFITABILITY A STUDY OF SELECTED LISTED CEMENT FIRM IN PSX

Abstract

Purpose The objective ofthis research is to identify the impact cash management has on profitability of cement firms. Those organizations that technically grips cash management can use it for smooth business operations. Efficiently and effectively managed cash gives assurance of harmonized cash inflows and outflows. Cash management is different and unique to manage, organization should adopt optimal technique to protect from disruption of daily operations. Organizations that do not emphasis on cash management will face incompetence of meeting short term debts (Nasr, 2007). Methodology & Design Data pertaining to cement companies is collected from Financial Statements offirms listed in PSX for the period of 5 years (2014-2018). Panel data methodology was adopted because it combines period and cross-sectional data. To analyze the panel data, the researcher used Pearson’s Product Moment Correlation Coefficient and Poisson regression analysis which is used to describe and evaluate the relationship between the given variables. Findings The outcomes suggest that there is negative association between earing and cash conversion cycle. IfCCC rises, then profit ofthe firm decreases. The inference of above findings is that a firm with a comparatively shorter period of CCC is more lucrative and cost effective. Hence, lessening CCC is a possible technique for the industries to generate additional investor's worth.