Open AccessDeterminants of Manufacturing Firms’ Financial Performance in Pakistan
Author(s) -
DR. SAID SHAH,
Salman Shah
Publication year - 2021
Publication title -
journal of business and tourism
Language(s) - English
Resource type - Journals
eISSN - 2521-0548
pISSN - 2520-0739
DOI - 10.34260/jbt.v3i2.67
Subject(s) - working capital , business , stock exchange , finance , investment (military) , stock (firearms) , capital (architecture) , industrial organization , monetary economics , economics , mechanical engineering , archaeology , politics , political science , law , history , engineering
Investment in working capital by and large shows better returns than investment in fixed assets. As such proper management of working capital rightfully attracts a lot of attention. The objective of this research is to examine the impact of size and working capital management efficiency on firms’ financial performance using 10 years (2004- 2013) secondary data of 153 firms listed on Pakistan Stock Exchange and employing regression and ratio analyses. Results show that performance-wise large firms are better whereas WCME-wise small and medium firms are better. These findings indicate that better performance of large firms is not because of efficient utilization of working capital - rather it may be due to some other factors and these firms can further improve their performance if working capital is managed more efficiently.