Relationship Between Working Capital Management and Profitability: A Case of Tabreed (National Central Cooling Company PJSC)

Date
2017
Authors
Venkatachalam, R.
Journal Title
Journal ISSN
Volume Title
Publisher
Springer Science and Business Media B.V.
Abstract
Working capital management is a function of management to decide the optimum level of the various items of working capital. Though the current assets do not help increasing productivity, they are very much important in carrying a successful business. Too much of working capital may lead to idle current assets and increase carrying cost of current assets and it reduces the profit. On the other hand, if too low working capital is maintained the business faces liquidity risk and may lead to bankruptcy. This study aims to investigate the relationship between profitability and the various components of current assets of Tabreed. Pearson simple correlation technique and multiple regression analysis were employed. The study showed that working capital turnover ratio, cash turnover ratio and debtors turnover ratio have positive association with return on investment and other ratios such as current ratio, quick ratio, current assets-to-total assets ratio, current assets-to-sales ratio, and inventory turnover ratio have negative association with profitability. © 2017, Springer International Publishing Switzerland.
Description
This conference paper is not available at CUD collection. The version of scholarly record of this paper is published in Leadership, Innovation and Entrepreneurship as Driving Forces of the Global Economy. Springer Proceedings in Business and Economics (2017), available online at: https://doi.org/10.1007/978-3-319-43434-6_64
Keywords
Capital working management, Liquidity risk, Multiple regression Analysis, Profitability
Citation
Venkatachalam, R. (2017). Relationship between working capital management and profitability: A case of tabreed (national central cooling company PJSC). In R. Benlamri & M. Sparer (Eds.) Leadership, Innovation and Entrepreneurship as Driving Forces of the Global Economy. Springer Proceedings in Business and Economics (721–729). Springer, Cham. https://doi.org/10.1007/978-3-319-43434-6_64