Optimizing Working Capital Boosts Profitability: Tabreed Case Study Unveils Secrets
Working capital management is crucial for businesses to balance current assets effectively. Too much working capital can lead to reduced profits, while too little can cause liquidity issues. A study on Tabreed found that certain ratios like working capital turnover, cash turnover, and debtors turnover have a positive impact on profitability. However, ratios like current ratio, quick ratio, and inventory turnover have a negative association with profitability.