Efficient working capital management boosts financial performance for trading firms.
Working capital management is crucial for companies to have enough cash to pay debts and expenses. This study looked at how efficiently managing working capital affects financial performance in trading firms. By analyzing data from 9 companies, researchers found that high investments in inventory and receivables can lead to lower profitability. Some firms were found to have efficient working capital management, while others were inefficient. Overall, the study shows that how well a company manages its working capital can impact its financial success.