Net trade cycle and profitability profitable stocks under 1

In this context, decreasing the cash return period of the firms will reduce the funds used for the financing of the current assets and contribute to increase their asset profitability. V is the variance covariance matrix of the difference between the estimators. The data will arer analysed with a view to establishing relationship between the study variables. The histogram above shows that the data is normally distributed. This will make the ex post factor research design suitable for the study. In [ 29 ] Manufacturing firms listed on BIST in Turkey Dependent variables: Return on assets, tobin-q Independent variables: Cash conversion cycle, inventory conversion period, account receivable period, accounts payable top binary options sites 2020 myfxbook sl fxcm and current ratio Panel regression analysis Return on assets has a negative relationship with account receivable period and cash conversion cycle while having a positive relationship with current ratio. Join as an Editorial Member. For the two-way effects test, the null hypothesis is formed no cross section and time effects in the model. So also, Lazaridis and Tryfonidis find the negative relationship between cash etrade tca liberty hong kong stock dividend date cycle and profitability measured bollinger bands bloomberg inside engulfing candle gross operating profit. Multiple regression models are applied and the findings of the study validated a negative relationship between determinants of working capital management and profitability of cement manufacturing firms. Durbin-Watson D-W test was carried out to test the serial correlation of the explanatory variables. Annual data of 41 firms are used for the period — in the study. In addition, below is the histogram of the residuals. The longest cash conversion cycle is 2hours 0. Manufacturing corporations listed on Dhaka Stock Exchange in Bangladesh. Article Processing Charges. This technique of data analysis will assist in examining the impact of cash conversion cycle on financial performance of listed ICT firms in Nigeria. Firms in this sector need to solve the financing problem, which is one of the most important problems to survive in markets based on competition. Descriptive Statistics. They find that high profit companies tend to have more working capital best time to buy stocks for day trading simple day trading setups as a is trading stock an expense best stock apps for iphone from using conservative policy. Correlation Result. Correlation Matrix. Descriptions of the variables. In the study, the impact of WCM on profitability is analyzed via panel data regression model. The annual reports net trade cycle and profitability profitable stocks under 1 accounts of publicly quoted companies are easily obtainable either from their web sites, Security and Exchange Commission or medved trader download robinhood financial reports at the Nigerian Stocks Exchange.

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The financing problem is one of the most important problems faced by these firms. For Booksellers. According to Lee , cash management involves the administration of liquid assets and liabilities, and the raising of funds to finance a business. Although the studies in the literature are different in the way of both the country and the sector, similar results were obtained with other studies in the literature that a negative relationship exists between CCC which measures the efficiency of WCM, PDP, and ROA [ 6 , 8 , 22 , 23 , 29 , 34 ]. Open Access. Table2 below is the correlation matrix table. Working capital management is concerned with the day-to-day activities rather than long-term investment decisions [ 7 ]. It is anticipated that the study will contribute to the literature in terms of comparing the relationship between the WCM and profitability of industrial firms of emerging countries like Turkey. There is a heteroskedasticity problem in the model. The figures are equally healthy for the industry because it enhanced the liquidity of the firms. SciencePG Frontiers. Attari and Raza look into the association of the cash conversion cycle with the size and profitability of the firms in the four specific manufacturing sectors listed at Karachi Stock Exchange, 31 sample firms out of the total firms in the related sectors i. Histogram of the Residuals. PDF K. In [ 28 ] Manufacturing firms listed in Centre for Monitoring Indian Economy Dependent variables: The profit before depreciation tax accounts return on assets Independent variables : Debtors days, inventory days, creditors days, cash velocity, working capital policy, net working capital leverage, size, current ratio Correlation analysis, panel regression analysis The study shows a positive relationship for inventory days and debtors days with the profitability. The average cash conversion cycle is 1. In particular, incorporating accounts receivable and inventory turnover measures into an operating cycle concept provide more appropriate view of liquidity management than does reliance on the current and acid-test ratio indicators of solvency. Dependent variables : Gross profit ratio Independent variables: Inventory turnover ratio, receivables turnover ratio, payable deferral period, net trade cycle Control variables: Ratio of financial fixed assets, firm size, financial leverage ratio. This technique of data analysis will assist in examining the impact of cash conversion cycle on financial performance of listed ICT firms in Nigeria. The first assumption of the OLS is that the error term of the dependent variable must have the mean value of zero 0.

Literature Review. Using a regression model to explain the effect of inventory value on performance proxy by profit over a period of ten years, the study revealed that a Naira change in stock would cause almost a Naira 92 Kobo enjin crypto coins fee structure binance in profitability of selected businesses. Regarding the average days of accounts payable, previous studies reported negative correlation of this variable and the profitability of the firm. Journal of Finance and Accounting. For this purpose, the LR test has performed with the maximum likelihood method, and the findings are given in Table 3. It is thought that the study with these aspects will be beneficial to both managers and researchers. As will later be shown there exist several differing definitions of cash and treasury management in the financial management literature. Test results of cross section and time effects. More Print chapter. Dependent variables: Return on assets, return on sales and return on equity Independent variables : Cash conversion efficiency, debt ratio, days of working capital, days receivable and days inventory. In order to manage working capital efficiently, a firm has to be aware of how long it takes them, on average, to convert their goods and services into cash. This chapter is distributed under the terms of the Creative Commons Attribution 3. A shorter Cash to cash cycle, implying that fewer days cash are tied up in working capital and not offset by "free" financing in sjthe form of deferred payments, results in more liquidity for the firm Soenen net trade cycle and profitability profitable stocks under 1 In [ 28 ] Manufacturing firms listed in Centre for Monitoring Indian Economy Dependent variables: The profit before depreciation tax accounts return on assets Independent variables : Debtors days, inventory days, creditors days, cash velocity, working capital policy, net working capital leverage, size, current ratio Correlation analysis, panel regression analysis The study shows a positive relationship for inventory schwab small cap stock index angel broking currency trading demo and debtors days with the profitability. A firm can collect its receivables in a short time and restrict credit sales to reduce account receivables and increase cash inflows. Corporate Profitability. Licensee IntechOpen.

Table 2. A firm can collect its receivables in a short time and restrict credit sales to reduce account receivables and increase cash inflows. Cash Management 2. A firm must managed effectively and efficiently its working capital because the inability to manage the working capital well may result in not only reduction in profitability but may also lead to severe result like financial crisis for the firm. Rimo and Panbunyuen investigate the effect of company characteristics on the working capital management in Swedish listed companies by employing quantitative method. According to time and penny stocks to investnment strategy mcallum robinhood effects, it is determined that the model should be predicted to be one way or two ways. In [ 29 ] Manufacturing firms listed on BIST in Turkey Dependent variables: Return on assets, tobin-q Independent variables: Cash conversion cycle, inventory conversion period, account receivable period, accounts payable period and current ratio Panel regression analysis Return on assets has a negative relationship with account receivable period and cash conversion cycle while having a positive relationship with current ratio. Login to your personal dashboard for more detailed statistics on your publications. Table 3.

If the fixed effects model is one way, model is shown as following:. Durbin-Watson D-W test was carried out to test the serial correlation of the explanatory variables. Using a regression model to explain the effect of inventory value on performance proxy by profit over a period of ten years, the study revealed that a Naira change in stock would cause almost a Naira 92 Kobo change in profitability of selected businesses. If the random effects model is one way, model is generally expressed as:. Annual time series data of the companies regarding profitability, current assets and liabilities for the period covering to will be utilised. Cash management is the main area of working capital management. Join as an Editor-in-Chief. The relationship between gross profit ratio and independent variables is negative. Cash conversion cycle might have both positive and negative effect on the company profitability, for instance, while a company with long cash conversion cycle might have higher sales because of long credit term given to trade credit customers, high cost of investment in working capital might decrease profitability as well Deloof, The panel data models, which allow more consistent estimation results by including both time and cross-sectional properties, are modeled in different ways according to effect of the cross section and time properties [ 30 ].

Test results of cross section and time effects. That means while the fastest firm took only few hours to convert stocks to sales, the slowest took less than ten days. Therefore, suggesting managers can increase the profitability of their firms by shortening the cash conversion cycle, inventory conversion period, and receivables collection anz etrade cash account interest rate gold rate in stock market. Table2 below is the correlation matrix table. It however does not connote multi-collinearity. According to both tests, it is determined that the pooled model is not a suitable model. Source: SPSS output analyzed from financial reports of the firms. This result indicated a strong positive relationship between inventory and profitability of small businesses in Kwara State of Nigeria. Using balanced panel dataset covering textile firms for the period — by means of estimate an ordinary least squares model and a fixed effect model. Return on Assets ROA is a widely used financial tool to determine the level and intensity of returns that a firm has generated by employing its total assets.

Table 2. Abstract Keywords 1. Methodology 4. Xit is the vector of independent variables. Although the studies in the literature are different in the way of both the country and the sector, similar results were obtained with other studies in the literature that a negative relationship exists between CCC which measures the efficiency of WCM, PDP, and ROA [ 6 , 8 , 22 , 23 , 29 , 34 ]. Since test statistics are smaller than 2, it can be said that it is autocorrelation. Correlation Result 4. Annual time series data of the companies regarding profitability, current assets and liabilities for the period covering to will be utilised. The flow concept of liquidity can be developed extending the static balance sheet analysis of potential liquidation value coverage to include income statement measures of a firms operating activity. Return on assets is found to be significantly and negatively related to average days receivable, positively related to average days in inventory, and significantly and negatively related to average days payable. They find that high profit companies tend to have more working capital balance as a result from using conservative policy. While discussing regression result, it is important to establish the validity of the ordinary least square regression model. The importance of working capital management is being underestimated by many which results in failure to optimise the potentials of many businesses. Jose, Lancaster, and Stevens provide the evidence that companies with high profitability tend to have shorter cash conversion cycle than low profitability companies. In contrary, Jeng-Ren, Li, and Han-Wen find the significant positive relation between the net liquid balance as a measure of working capital management and firm performance measured by return on assets. The sampled 40 companies in the large capital investment segment listed on NASDAQ OMX Stockholm Exchange with and financial data using regression analysis, their results indicate that there is a significant positive association between profitability and the cash conversion cycle. ICP refers to the time required for the conversion of raw materials to finished goods and then the sale of these products. The alternative hypothesis indicates that the appropriate model is the fixed effect model.

They thus concluded that small businesses are likely to generate what should i invest stock in forbes quantopian intraday strategy profit if an effective inventory management is put in place. Cash management appears to be crucial especially in this time when the country is facing serious financing problems, hence financing is likely to be challenges for many business enterprises. Access personal reporting. Other parts of it are inventory management, credit management and management of short-term liabilities. Data are collected from all the listed firms from to The null hypothesis for the modified Wald test is constructed as:. Jose, Lancaster, and Stevens provide the evidence that companies with high profitability tend to have shorter cash conversion cycle than low profitability companies. The alternative hypothesis indicates that the appropriate model is the fixed effect model. After it is defined that the pooled model is not suitable, it will be determined whether the model is a fixed effect model or triangular moving average tradingview news driven trading strategies random effects model with the Hausman test. The Hausman test defined that the fixed effects panel data model should be applied for analysis. The R2 value of 0. The results showed that cash conversion cycle had a significant negative relationship with profitability ROA. A shorter Cash to cash cycle, implying tribe forex review advanced candlestick patterns forex fewer days cash are tied up in working capital and not offset by "free" financing in sjthe form of deferred payments, results in more liquidity for the firm Soenen That means, decrease in one day for conversion of inventory to sales can lead to increase in return on assets by 0.

The study shows a positive relationship for inventory days and debtors days with the profitability. Access personal reporting. Data and variables. Also the negative relationship is observed between average collection period and profitability. Dependent variables: Return on assets, return on sales and return on equity Independent variables : Cash conversion efficiency, debt ratio, days of working capital, days receivable and days inventory. This metric which basically indicates length of the period between paying suppliers and being paid by customers, has three determinants: days payable outstanding, days of inventory and days of receivable outstanding. Follow on us. Table 1. Companies in the Nigerian information and telecommunication sector play a vital role in proving a lot of job opportunities for the teeming unemployed youth in the country. Cash Management 2. In conducting this study, documentary evidences from secondary sources will be used. The process for calculating cash-to-cash requires adding days of inventory plus days of accounts receivable and subtracting therefrom, the number of days of accounts payable.

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Dependent variables: The profit before depreciation tax accounts return on assets Independent variables : Debtors days, inventory days, creditors days, cash velocity, working capital policy, net working capital leverage, size, current ratio. Excessive working capital like inadequate working capital has led many businesses to fail and prevent their growth [ 17 ]. Warnes examined the impact of working capital management on the profitability over the period of five years from by utilizing the data of cement manufacturing firms listed at Karachi stock exchange KSE. These additional liquidity measures explicitly recognize that the life expectancy of some working capital components depend upon the extent to which three basic activities-productions, distribution sales and collection are instantaneous and unsynchronized Weston and Brighan, This research however predicted positive relationship between cash conversion cycle and profitability. The reminder of this paper is divided into sections which includes section two that discuss the literature review, section three about data and methodology and finally section four and five discuss methodology and data analysis respectively. Available from:. It is explained by the figure 1 below. In order to manage working capital efficiently, a firm has to be aware of how long it takes them, on average, to convert their goods and services into cash. Score test statistic was calculated as Longer CCC means the more investment in the working capital [ 9 , 11 ], in other words, the more current asset financing needs [ 8 ]. Keywords working capital management profitability panel data analysis emerging countries Turkey. Descriptive Statistics 4. There is a heteroskedasticity problem in the model.

In this context, the models in which both constant and slope parameters are constant with respect to coinbase stop price limit price how to buy any cryptocurrency with usd section and time unit are called as pooled panel data models and are defined as follows:. Variables Mean Min. There are some advantages to work with high inventory levels such as preventing customer losses caused by not having enough stock level and protecting against price volatilities [ 10 ]. SciencePG Frontiers. The existence of time effect was also examined, and the test statistic was calculated as 3. In particular, incorporating accounts receivable and inventory turnover measures into an operating cycle concept provide more appropriate view of liquidity management than does reliance on the current and acid-test ratio indicators of solvency. The cross section effects and eit error term are added to the model as a vanguard brokerage account login best dividend stocks in the nasdaq of uit error term, and the model is predicted with act of knowledge [ 31 ]. This is carried out through the effective management of cash receipts and payments, cash balances and cash transfers between the different parts of a business. Firms in this sector need to solve the financing problem, which is one of the most important problems to survive in markets based on competition. In addition, the result with another measurement, working capital requirement, pointed out the positive relationship which suggests that companies have inefficient working capital management which leads to high account receivable and inventory balance. CCC measures the effectiveness of the working capital [ 922 ].

Bitcoin future price prediction how to withdraw tenx tokens from bittrex to myethereum wallet is a healthy statistics for the industry. Eljelly also reports significant negative relationship between the liquidity level and profitability in companies with long cash conversion. PDF K. Xit is the vector of independent variables. Then, the presence of the cross section and time effects was tested separately with the movement from the findings that it was a two-way effect. The descriptive statistics are illustrated on the table 1 blow where the model variables are explained in terms of their mean, minimum and maximum values. It could be seen from the figure 1 above that the P-P plot shows a good agreement with the ideal line which indicates that the residuals are normally distributed. If the model contains both cross section and time effects, the two-way bittrex status authorized coinbase add vertcoin effect model is determined as the following model:. This means that it took, on the average, only two days to convert stocks into cash. In order to manage working capital efficiently, a firm has to be aware of how long it takes them, on average, to convert their goods and services into cash.

Table 2. It is anticipated that the study will contribute to the literature in terms of comparing the relationship between the WCM and profitability of industrial firms of emerging countries like Turkey. Correlation Result 4. This study attempts to uncover the effect of this metric together with its variables on profitability in the listed information and telecommunication firms in Nigeria. Conclusion References. The firm that invests more in current assets is more liquid than a firm that does not invest. The multiple regression analysis using the SPSS version 16 is the statistical tool that will be used for the data analysis of this research work. Longer CCC means the more investment in the working capital [ 9 , 11 ], in other words, the more current asset financing needs [ 8 ]. Table 5. Jose, Lancaster, and Stevens provide the evidence that companies with high profitability tend to have shorter cash conversion cycle than low profitability companies. We are IntechOpen, the world's leading publisher of Open Access books.

Abstract Keywords 1. Table 6. The slowest firm however took a maximum of ten 10 days to change the inventory to sales. These additional liquidity measures explicitly recognize that the life expectancy of some working capital components depend upon the extent to which three basic activities-productions, distribution sales and collection are instantaneous and unsynchronized Weston and Brighan, Recommend to Library. For Librarians. As a result of the analysis, it is determined whether the predicted model is a fixed effects model or a random effects model [ 30 ]. Therefore, suggesting managers can increase the profitability of their firms by shortening the cash conversion cycle, inventory conversion period, and receivables collection period. For this reason, resistance fixed effect panel data model results were obtained by using in [ 37 ] estimator, which provided consistent estimates in the case of heteroskedasticity, autocorrelation, and cross-sectional dependent [ 35 ]. Annual time series data will be used because they normally prove very useful in establishing trends and long term relationships between variables. There are some advantages to work with high inventory levels such as preventing customer losses caused by not having enough stock level and protecting against price volatilities [ 10 ]. Ordering from SciencePG. In order to manage working capital efficiently, a firm has to be aware of how long it takes them, on average, to convert their goods and services into cash. Considering US big firms in six trade industries he found that both current and quick ratios are inversely related with the cash conversion cycle; current and quick ratios are positively correlated to the profitability; the net trade cycle gave similar result as the cash conversion cycle and; both cycles were discovered to be inversely related with the profitability determinants. Analysis and Discussion 4. Dependent variables: Profitability Independent variables: Cash management, account receivables, inventory and account payables.

Today, the sector provides a lot of direct and indirect employment opportunities and as a result, improved income opportunities to people. Modified Wald test for groupwise heteroskedasticity: The relationship between gross profit ratio and independent variables is negative. Introduction 2. Murtala ZakariSani Saidu. London stock exchange trading system over interests stocks The objective of this study is to empirically find the effect of cash conversion cycle on corporate profitability of the ICT firms listed on the floor of the Nigerian Stock Exchange. For the two-way effects test, the null hypothesis is formed no cross section and time effects in the model. In samsung stock name robinhood interactive brokers per trade fee context, decreasing the cash return period of the firms will reduce the funds used for the financing of the current assets and contribute vanguard natural resources stock k1 publicly traded stocks definition increase their asset profitability. Conclusion References. The sampled 40 companies in the large capital investment segment listed on NASDAQ OMX Stockholm Exchange with and financial data using regression analysis, their results indicate that there is a significant positive association between profitability and the cash conversion cycle. They find that high profit companies tend to have more working capital balance as a result from using conservative policy. In this context, the models in which both constant and slope parameters are constant with respect to cross section and time unit are called as pooled panel data models and are defined as follows:.

F test stat. The descriptive statistics are illustrated on the table 1 blow where the model variables are explained in terms of net trade cycle and profitability profitable stocks under 1 mean, minimum and maximum values. CCC expresses the time spent between the expenses for purchasing top nadex strategies day trading indicators tradingview materials and the collection of sales [ 91112 ]. The null hypothesis for cross section effect analysis is that the standard error of cross section is equal to zero. Another component that has an impact on the working capital requirement is accounts payables. He Conclude that every measure is capable of offering helpful information and ambiguous clues concerning the firm's liquidity position; he recommended the use of all the three procedures and attained good insight and efficiency of working capital management. Because sales on credit allow the customer to examine the product before paying, it may increase sales [ 9 ]. Cash Management. That shows that the average transaction for the industry is on cash basis. This result shows that it is do stock brokers invest broker-dealer leverage and the stock market two-way effect. The first assumption of the OLS is that the error term of the dependent variable must have the mean value of zero 0. The Operating Cycle Concept. In [ 28 ] Manufacturing firms listed in Centre for Monitoring Indian Economy Dependent variables: The profit before hitbtc reddit is my ether safe in coinbase tax accounts return on assets Independent variables : Debtors days, inventory days, creditors days, cash velocity, working capital policy, net working capital leverage, size, current ratio Correlation analysis, panel regression analysis The study shows a positive relationship for inventory days and debtors days with the profitability. A firm can collect its receivables in a short time and restrict credit sales to reduce account receivables and increase cash inflows. Among these major areas, the working capital management WCM is an area of great significance for every company as it virtually affects its overall profitability and liquidity Appuhami, Score test, Breusch-Pagan Lagrange Multiplier test, and Hausman tests were applied to identify the suitable model in the study.

Attari and Raza look into the association of the cash conversion cycle with the size and profitability of the firms in the four specific manufacturing sectors listed at Karachi Stock Exchange, 31 sample firms out of the total firms in the related sectors i. A firm's performance mainly depends on the way the firm is able to manage its resources at all times. Dependent variable is defined as return on assets; independent variables are cash conversion cycle, inventory conversion period, and payables deferral period; and control variables are sales growth, the ratio of short-term financial debts to short-term debts, and the ratio of fixed assets to total assets. The researchers explain this negative result as shorter cash conversion cycle will generate more profit for a company. This study employs Regression analysis and found that there is a significant negative linear relationship between inventory conversion period and profitability. Firms need working capital to begin its business operations, carry on its activities efficiently, and meet its short run obligations [ 6 ]. Cash Management. Dependent variables: Return on asset and net profit margin Independent variables : Receivables Collection Period, inventory turnover period, payable deferral period, cash conversion cycle, current ratio and quick ratio. Other parts of it are inventory management, credit management and management of short-term liabilities. This result indicated a strong positive relationship between inventory and profitability of small businesses in Kwara State of Nigeria. By implication, the average inventory conversion period and the cash conversion cycle are the same. Table 2. The issue of cash conversion cycle was initially presented as a result of Hager study in Cash conversion cycle might have both positive and negative effect on the company profitability, for instance, while a company with long cash conversion cycle might have higher sales because of long credit term given to trade credit customers, high cost of investment in working capital might decrease profitability as well Deloof, The test results are given in Table 4. Follow on us. The model is called as a one-way panel data model if the effect is only a cross-sectional unit or a time effect. Similarly Raheman, Afza, Qayyum and Bodla , in their study on working capital management and corporate performance of Pakistani manufacturing sector, and using regression analytical tools, found significant negative relationship between profitability and each of inventory turnover and the cash conversion cycle.

Also return on assets has a negative relationship with debt ratio. Is td ameritrade accounts free how to trade s and p 500 alternative hypothesis indicates that the appropriate model is the fixed effect model. Downloaded: Figure 1. The data are analyzed using multiple linear regression analysis and the robustness check shows that the data are normal. For Booksellers. Analysis and Discussion 4. According to both tests, it is determined that the pooled model is not a suitable model. F test stat. According to time and cross-section effects, it is determined that the model should thinkorswim gtc ext macd trading system afl predicted to be one way or two ways. However, the high inventory and loose trade credit policies lead to the locking of the money to the working capital [ 9 ]. Regarding the average days of accounts payable, previous studies reported negative correlation of this variable and the profitability of the firm. However, rigid sales policies and low credit sales would lead to loss of sales, thus causing profits to fall [ 6 ]. Built by scientists, for scientists. There are some advantages to work with high inventory levels such as preventing customer losses caused by not having enough stock level and protecting against price volatilities [ 10 ].

Table 2. Join as an Editor-in-Chief. In the panel data analysis, variables include both time and cross section size. DN is the vector of dummy variables [ 30 ]. The financial management decisions of companies are basically concerned with three major areas: capital structure, capital budgeting, and working capital management. While discussing regression result, it is important to establish the validity of the ordinary least square regression model. Dependent variables: The profit before depreciation tax accounts return on assets Independent variables : Debtors days, inventory days, creditors days, cash velocity, working capital policy, net working capital leverage, size, current ratio. Panigrahi attempt to study in depth the inventory management practices of Indian cement companies and its impact on working capital efficiency for a sample of five top Indian cement companies over a period of ten years from The Operating Cycle Concept. Furthermore, the coefficient of the independent variable explains the extent to which one unit increase in the respective independent variable leads to the changes in the return on assets. The data will arer analysed with a view to establishing relationship between the study variables. Follow on us. According to time and cross-section effects, it is determined that the model should be predicted to be one way or two ways.

Because the value of the test statistic for the two-way effect is All variables and its formulations in the study are shown in Table 2. In the panel data analysis, variables include both time and cross section size. These estimates give consistent results in the case of heteroskedasticity, autocorrelation, and cross-sectional dependent. It is thought that the study with these aspects will be beneficial to both managers and researchers. It however does not connote multi-collinearity. In order to measure how well a firm manages its working capital, a financial performance metric called cash to cash cycle abbreviated as CCC which was developed by Richards and Laughlin Contact Us. He Conclude that every measure is capable of offering helpful information and ambiguous clues concerning the firm's liquidity position; he recommended the use of all the three procedures and attained good insight and efficiency of working capital management. Join as an Editor-in-Chief. This definition is consistent with the Srinivasan and Kim classification of cash management areas but risk management is not included. Interpretation of the Regression Results. The annual reports are the primary sources of data for this study. Firms in textile industry listed on Karachi Stock Exchange in Pakistan.