A panel data analysis of working capital management policies

Authors

Mian Sajid Nazir, COMSATS Institute of Information Technology, Lahore, Pakistan
Talat Afza, COMSATS Institute of Information Technology, Lahore, Pakistan

Abstract

The present study investigates into the traditional relationship of working capital management and firm’s profitability. Using panel data set for the period of 1998- 2005, the impact of aggressiveness of working capital investment and financing policies have been evaluated on return on assets as well as Tobin’s q. Managers can create value if they are adopting for a conservative approach towards working capital investment and working capital financing policies. However, if firms are having aggressive approach to manage the short term liabilities, investors give more value to those firms in stock markets.

Keywords

Working capital, Aggressiveness, Conservativeness, Profitability, Panel data

DOI

https://doi.org/10.54784/1990-6587.1170

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Recommended Citation

Nazir, M. S., & Afza, T. (2009). A panel data analysis of working capital management policies. Business Review, 4(1), 143-158. Retrieved from https://doi.org/10.54784/1990-6587.1170