The impact of Working Capital Management on Profitability of the Listed Firms in Sri Lanka

Abstract

In this research the researcher attempts to take result of comparison among industries based on working capital management. Working capital to the company is like the blood to human body. If it is carried out effectively, efficiently and consistently, that will assure the health of an organization. The purpose of this research is to contribute towards a very important aspect of financial management known as working capital management with reference to Sri Lanka. Here the relationship between working capital management Practices and its effects on profitability of selected industries listed on Colombo stock Exchange for a period of five years from 2003-2007. Five sectors have been selected out of 20 business sectors. This research study concluded that working capital has significant impact on profitability of the sector. Therefore, significant indicates that closed relationship between working capital and profitability. It may be positive or negative.