Impact of Working Capital on ROA, ROE and EPS On Pakistani Listed Companies

Abstract

This thesis investigates the relationship between working capital management and return on asset, return on equity and earning per share in Pakistani listed companies. This study used a sample of 25 firms listed in Pakistani listed companies from the year 2010-2020. The aim of this research is to test the effect of working capital management in the form of cash conversion cycle measurements on the profitability of firms (ROA, ROE & EPS) in Pakistani listed companies. The results of this study revealed that there is no statistically significant relationship between cash conversion cycle measurements and profitability of firms measured as Return on Asset, return on equity and Earning per share. Moreover, managers should use other tools and strategies to improve their firm’s profitability rather than managing the working capital efficiently.