Impact Of Working Capital Management On Firms’ Profitability And Liquidity: A Critical Assessment

Abstract

Working capital is essential for making important financial choices. An integral part of managing working capital is ensuring that it remains liquid on a day-to-day basis. Today's business is all about keeping the ship afloat and paying the bills. Therefore, it is important to evaluate the aspects involved in working capital management, such as the time it takes to collect receivables, store and sell inventory, pay bills, and convert cash. This study's overarching goal is to determine how changing the days of collection, payment,
conversion to inventory, sales, and finally the cash conversion cycle affects a company's profitability and liquidity