impact of working capital management ON THE PERFORMANCE OF PAKISTAN’S FERTILIZER INDUSTRY: A CASE STUDY ON 3 LISTED FIRMS IN PSE 100 INDEX

Abstract

This research study is conducted to determine the impact of the elements of the working capital management practices on the overall performance of the firms operating in the fertilizer industry of Pakistan and to understand the relationship which working capital management approach is following within the industry and the nature of relationship between the working capital management practices to the overall performance of the firm. It is an explanatory research. The targeted population of this research is the fertilizer industry of Pakistan that are listed in Pakistan Stock Exchange 100 index and operate domestically. In this research study secondary data is used. Moreover, multivariate linear regression model is applied on the collected data to analyze the impact of the selected independent variables i.e. current ratio, debt to equity ratio, quick ratio, super quick ratio, accounts receivable turnover ratio and inventory turnover ratio on the performance of the firm for that return on assets, return on equity and net income margin as dependent variable. The results of this study reveals that the combine result models are all insignificant while some individual models are significant and insignificant. Furthermore, this study clearly indicates the importance of ratios to determine the performance of the listed firms and bringing improvement in working capital management practices.