Efficient working capital management boosts food sector profitability significantly.
Working capital management has a significant impact on a firm's profitability in the food sector. By analyzing data from 45 companies over five years, researchers found that efficiently managing working capital can enhance a firm's net profit margin, return on assets, and return on capital employed. However, the impact on return on equity was found to be insignificant. This study focused on the manufacturing industry due to its high proportion of current assets, making efficient working capital management crucial for success. The findings suggest that firms in the food sector can improve their financial performance by effectively managing their working capital.