IMPACT OF WORKING CAPITAL MANAGEMENT ON PROFITABILITY OF COMPANIES: AN EVIDENCE FROM TRANSPORT AND LOGISTIC (TLC) SECTOR OF PAKISTAN

Abstract

This study examines the relationship between working capital management and corporate performance using five transport and logistics (TLC) firm-level observations. With Return on Assets (ROA) averaging 6.55 with a standard deviation of 9.98, ranging from –22.09 to 27.49, the descriptive analysis shows that there is significant variation in profitability among firms. The Average Payment Period (APP) is 49.07 days and the Average Collection Period (ACP) is 21.14 days due to differences in how companies settle supplier obligations and collect receivables. Inventory (INV) records demonstrate a range of inventory management strategies with an average of 87.55. When taken as a whole, these metrics suggest that efficient inventory, payables, and receivables management increases profitability and liquidity. Businesses that keep these working capital components in the best possible balance experience reduced financial risk and increased operational effectiveness