Impact of Cash Conversion Cycle on the Profitability of firm. Evidence from Pakistani Firm

Abstract

The purpose of the study is to determine that how cash conversion cycle impacts a company's financial performance in the Manufacturing sector of Pakistan listed on Stock Exchange of Pakistan. In this research 5 years data was analyzed from year 2017 to 2021 to verify an assertion. Cash conversion cycle (CCC) is a key factor in business decisions, especially in industrial businesses. Because it affects the financial performance and cash flow. Cash conversion cycle is treated as an independent variable including its determinants. Profitability, usually determined by return on asset, acts as the dependent variable (ROA). Through statistical research, it has been shown that a prolonged cash conversion cycle turnover time will result in little money being invested in short-term securities, more money being available for equity capital, and a greater degree of profit and productivity. In order to generate and perform effective strategy and roadmap, management and workers may find this study useful.