Analyzing The Impact of Working Capital Management on Profitability: A Study of The Textile Sector in Lasbela

Abstract

The effect of working capital management on the profitability of textile enterprises in Lasbela, Balochistan, has been investigated using the secondary data of 2015 to 2022. The financial metrics of the five textile industries under analysis are examined in terms of return on assets (ROA), inventory turnover, cash conversion cycle, accounts receivable period, and accounts payable time. According to the findings, it is a key sign of how improved working capital management boosts revenues. Specifically, a shorter term of accounts receivable and optimized inventory turnover improves financial performance. According to this study, maintaining profitability in the textile sector requires both proactive payable management and a balanced cash conversion cycle. Practical measures can be taken to increase the industry's working capital efficiency and boost financial results.