Impact of Cash Conversion Cycle on the Profitability of Energy and Petroleum Industry

Abstract

This Research was conducted to examine the impact of cash conversion cycle on profitability of Energy & Petroleum industry. Moreover, the study outlines the main factors that basically determine the cash conversion cycle in the financials of Pakistan Energy & Petroleum industry. To manage firm’s cash conversion cycle and to reach a desire equilibrium level among profitability, figures was collected from Annual Reports and sample consist of 21 Pakistani Energy & Petroleum Companies listed in KSE from time span 2012-2017. For the calculation of Regression, Correlation, Coefficients and ANOVA testing, historical and panel data has used from 2012-2017 to find the results on the Stata software. The findings of this research are CCC is highly significant negatively related to profitability of Energy & Petroleum industry of Pakistan. ROA and NPM has been taken as the proxies of profitability and ROA is highly significant positive related to size of firm while age of firm is positively insignificant related to ROA. Leverage has negative significant impact on ROA. CCC and ROA has negative highly significant relation. NPM is negatively less significant correlated with CCC. Age of firm is positive highly significant related with NPM. Leverage has negative insignificant effect on NPM, and size of firm is positively insignificant correlated with NPM. overall this result will show that which variable is best for company