Working capital management impacts firm profitability, leverage weakens relationship significantly.
The study looked at how managing a company's money affects its profits in Pakistan. They studied 210 non-financial companies on the Pakistan Stock Exchange. They found that collecting money from customers quickly and paying bills slowly helps companies make more money. But having cash tied up for a long time hurts profits. Also, having a lot of debt weakens the link between managing money well and making profits. So, companies should think about how much debt they have when managing their money.