Impact Of Working Capital Management On Firm Performance(Case Study On China And Pakistan Stock Market)

This study has been done on impact of working capital management on performance of firm.Working capital usually means the funds needed to complete regular anxiety tasks.Purpose: The objective of study contains the measurement of overall Cash conversion cycle,which represents the working capital level of the organization and organizational profitability and to check the relationship between the working capital management and the organization profitability.There are also more of the operating assets as per assets and liabilities than current liabilities in terms of working capital management.Working capital management(WCM)is an issue that is debated in short-term financial management and is a complex financial decision for a company as well as its impact on corporate returns and liquidity.Methods: Methods for analysis included regression and correlation to test the significance of firm performance on working capital.Secondary data has been employed from annual reports of the firms registered in Pakistan and China.Results and conclusion: Analysis shows that credit turnover ratio has negative but insignificant impact on return on asset,inventory turnover ratio has significant positive impact on ROA,on the other hand credit ratio relates positively to return on asset in case of results of this study related to sample taken from Pakistan In case of China credit turn over has positive significant relationship with return on asset,and relationship between inventory turnover ratio and return on asset is also positive.CR has positive but significant impact on ROA,upon results of Cement sector in Pakistan.DTO has positive but significant impact on ROA.Recommendation: For normal business planning,managers must work to determine what is the most effective capital structure that best suits the needs of the company.Managers tend to underestimate working capital management and,as a rule,looking at the long term with an emphasis on long-term investments.Working capital management has been neglected for many years,as it requires considerable effort to change short-term policies compared to profit growth.