Abstract
The purpose of this study is to shed the light on various components of working capital management and how these components influence the financial performance of sugar companies. For this purpose secondary data is extracted from the annual reports of sugar companies listed on Pakistan stock exchange during the period 2008 to 2014. Panel data is used for the analysis. In this study return on asset and return on equity used as measure of profitability and in the working capital management criteria average collection period, average payment period, inventory turnover in days and cash conversion cycle variables are considered. The results show that financial performance of the sugar companies is significantly influenced by working capital management. So fund managers should focus not only the procurement of funds but also deployment of funds should be emphasized in order to create value for the stockholders and profitability in an effective and efficient manner can be result of proper management of working capital.
Keyword(s)
Working Capital Management, Performance, Evidence, Sugar Sector, Pakistan