Home > A Comparative Analsis of the Effect of Working Capital Management on the Profitability of Small and Large Companies Listed at Karachi Stock Exchange
A Comparative Analsis of the Effect of Working Capital Management on the Profitability of Small and Large Companies Listed at Karachi Stock Exchange
Working Capital Management has an overriding impact on a firm’s profit performance. However, the profitability of large firms, unlike small ones, might show a different degree of sensitivity to the efficient management of working capital. Presumably small firms and large firms are different from each other in that working capital management may affect more (or less) the profitability of one or the other. One wonders as to which type of firms (small or large) exhibit more escalation in their profitability as a result of a decent management of their working capital. Exploring the answer to this query is the basic aim of this research dissertation. To do that, effect of working capital management was determined on the profitability of the two forms of organizations separately and then the results so derived were compared in order to determine the difference in the possible effect of WCM on profitability of the two organization types, if any. To serve the purpose, two distinct samples were made, one having all the SME’s listed in the Karachi Stock Exchange and the other including the largest non-financial firms of the country listed in KSE, the data of which was available. Related data was gathered for firms in both samples for a period of six years from 2003 to 2008. All the relevant and the required financial information was acquired from an official document titled, “Balance Sheet Analysis of Joint Stock Companies Listed on the Karachi Stock Exchange --- (2003-2008)”, formally published by the Statistics and DWH Department of the State Bank of Pakistan (SBP). This document contained the Balance Sheet analysis of all the non-financial firms listed on the Karachi Stock Exchange as at June 30, 2008. Hence the research was entirely based on the Secondary data. It should be stated that the financial corporations like Banking Companies, Insurance Companies, Leasing Companies and Modarabas etc. were not included in this study. A total of 40 (out of 93) small firms were included in the first sample (known as Sample 1) for six years which led to 240 firm-year observations. Similarly, 103 (out of 343) large companies were incorporated in the second sample (known as Sample 2) for six consecutive years leading to 618 firm-year observations. Working Capital Management was measured by the Cash Conversion Cycle. As for the measurement of profitability, two variables were used; the Return on Assets and the Operating Profit to Sales. The Pearson Product Moment Coefficient of Correlation and the Linear Regression Analysis were used to examine the relationship between the Cash Conversion Cycle and that of the profitability variables. The correlation analyses were separately made for all the firms included in the two samples individually and then for the pooled data of each sample collectively so as to make a clear comparison. As for the Regression, two separate analyses were made, one detecting the influence of working capital management on the Return on Assets, and the other finding out the impact of WCM on the Operating Profit to Sales for both the samples. Results of the individual Correlation analysis for the two samples did not present a clear picture of whether the indicators of WCM had more, or less, influence on the profitability of small, or large, firms or vice versa. However, a comparison of the results of the Pooled Correlation analysis of the two samples suggested that the indicators of working capital management had a more visible impact on the profitability of firms of relatively larger size. In the first Regression analysis (called the Regression Analysis ‘A’), no significant associations were detected between the indicators of WCM and the Return on Assets for Sample 1. As for Sample 2, one of the WCM indicators, however, was found to be negatively and significantly related with the Return on Assets. The Regression analysis ‘B’, nonetheless, brought very clear demarcation between the effects of WCM on the profitability (Operating Profit to Sales) of the two samples. On the one hand, a very few significant relationships were found between the indicators of WCM and the profitability for Sample 1. And in contrast, the pooled data of Sample 2 displayed highly significant relationships of Operating Profit to Sales with all the indicators of working capital management including the Inventory Conversion Period, Receivable Collection Period, Payable Deferral Period and the Cash Conversion Cycle. This is a clear indication of the fact that the efficiency of managing working capital has more constructive effect on the profitability of larger firms. Hence, it is suggested for the managers of large-sized corporations to redouble their thought on the effective and vigilant management of their working capital so as to invigorate profitability.
محنت کامیابی کی ضمانت ہے نحمدہ ونصلی علی رسولہ الکریم امّا بعد فاعوذ بااللہ من الشیطن الرجیم بسم اللہ الرحمن الرحیم معزز اسا تذہ کرام اور میرے ہم مکتب ساتھیو! آج مجھے جس موضوع پر اظہار خیال کرنا ہے وہ ہے:’’محنت کامیابی کی ضمانت ہے‘‘ صدرِذی وقار! اس کائنات میں ہرشخص یہ چاہتا ہے کہ میں کامیاب و کامران ہو جاؤں۔ میری کامیابی و کامرانی کے ڈنکے چار دانگ عالم میں بجنے لگیں۔ میری زندگی کامیابی سے گزرے۔ کسی میدان میں مجھے ناکامی کا منہ نہ دیکھنا پڑے۔ میرے دوست میرے ساتھ ہمیشہ تعاون کرنے پر آمادہ ر ہیں۔ اپنے اعداء اور مخالفین کو بھی معاونت پر آمادہ کرنے پر کامیاب ہو جاؤں۔ محترم صدر! یہ بہت کچھ یونہی نہیں ہوگا ۔اس کے لیے انتھک محنت کی ضرورت ہے۔ اس کے لیے شب و روز کوشش کی ضرورت ہے۔ اس کے لیے مسلسل تگ و دو کی ضرورت ہے۔ اس کے لیے عمل پیہم کی ضرورت ہے۔ اس کے لیے مساعی جمیلہ کی ضرورت ہے، جیسے جیسے ہم محنت کرتے جائیں گے کامیابی کے دروازے ہمارے لیے کھلتے جائیں گے۔ یقین محکم ، عمل پیہم، محبت فاتح عالم جہاد زندگانی میں یہ ہیں مردوں کی شمشیریں جنابِ صدر! اگر کوئی طالب علم تعلیمی میدان میں کامیاب ہونا چاہتا ہے۔ اگر کوئی سیاستدان میدانِ سیاست میں کامیابی و کامرانی کے جھنڈے گاڑھنا چاہتا ہے۔ اگر کوئی قانون دان اپنی عظمت کا لوہا منوانا چاہتا ہے۔ اگر کوئی کسان اپنے کھیت و کھلیان کو کشت ِزعفران بنانا چاہتا ہے تو سب کو درمحنت و مشقت پر دستک دینا ہوگی۔
صدرِذی وقار! قرآنِ پاک میں ارشاد ِباری تعالیٰ ہے کہ ’’لیس للانسان الا ماسعی‘‘ یعنی انسان کو وہی کچھ ملتا ہے جس کے لیے وہ کوشش کرتا ہے جس کے لیے تگ و دو کرتا...
No doubt, throughout the last fourteen centuries, has been so widely read nor has shaped more human mindes than the Quran. Actually the Quran has a tremendous effect on the believers who recite it in its original language. Its language, as it is felt, is overwhelmed by the the power of the Devine word: hence the majesty of its style, and its captivating rhetoric, w hich reflects the pow er of the Divine w here it is originated. This artical also shows the greatness of the arabic language and its rhetorical effect in the light of Holy Quran. It tells us about the use of metaphor in Arabic language and Quran. It puts light on the diferenccs among the scholars wether there is Majaz in Arabic language and Quran or not? For the proof of its used both in language and Quran after the long discussion of linguistics and interpreters it is proved that it is one of the method of of the language to create the beauty in the speach. At the end of the artical it is conculuded through the views of the eminent scholars that the Majaz is also a style of the Arabic language and its rhetoric.
The consanguineous marriages are strongly favored in many human populations but their prevalence and structure vary depending on culture, religion, and socioeconomic conditions of respective population. These marriages are reported as the leading cause of enhancing the prevalence of autosomal recessive genetic disorders. The challenge of genetic disorders’ burden in the population calls for the development of prevention programs. But the strategies for their implementation require the information about types and prevalence of genetic disorders and family system in population. These achievements are possible by thorough understanding of the determinants of human population genetic structure that is mainly determined by the marriage pattern. Furthermore, the pattern of close marriages in population along with other factors leads to develop the isolated groups having typically confined, well- documented, extended and multigenerational pedigrees. The extended pedigrees with rare disorders are used by geneticists for their linkage studies. Present study focuses on consanguinity and genetic disorders in the population of District Dera Ghazi Khan, Punjab, Pakistan because of its unique geographical location and population structure. The district Dera Ghazi Khan is situated in the center of Pakistan, bounded on the North by Dera Ismail Khan District of N.W.F.P; on the West by Musa Khel and Barkhan districts of Baluchistan, on the South by Rajan Pur, and on the East by river Indus that separates it from all other districts of Punjab province. The population of Dera Ghazi Khan is mainly a tri-ethnic mixture of Baloch, Natives (Non-Baloch) and Indian Migrants (Muhajirs). Social and cultural activities vary in the area but marriages are mostly endogamous within caste or tribes. The harsh and adverse environmental condition restricts the movement of people that result in development of extended families /founder population. The present study showed 70.52% endogamous marriages in the general population and 71.62%, 69.62%, and 70.42% in Baloch, Migrant, and Native populations, respectively. Furthermore high rate of consanguinity (53.57%) with 0.0301 mean coefficient of inbreeding was observed in general population. The first-cousin marriages were found more prevalent. The results were also discussed on the bases of educational status, occupation, and socioeconomic condition and a strong link with these factors wasobserved. Furthermore, statistically significant effect of consanguinity on pregnancy loss (miscarriages, abortions, prenatal deaths), and perinatal deaths (still births, birth of dead child and early neonatal deaths) were found. In addition, the effect of marriage types on specific group of genetic disorders like skin disorders (Albinism, EDs, Alopecia, Aposthia, etc), non-syndromic deafness, and thalassemia were also studied. Five families (A, B, C, D, and E) clinically showed the presence of abnormal nails and skin. In the affected individuals, nychodystrophy of fingernails and toenails started at the same time but differentially lead to anonychia on toenails and onycholysis on fingernails. The skin was abnormal, which bruises and blisters easily. The affected individuals of these skin families showed abnormally high sweating, missing finger-prints and palmoplantar keratoderma. Two families (F, G) exhibited typical features of congenital alopecia including absence of hair on the scalp, axillae, pubic, and other parts of the body. In Family F, linkage was established to hair loss locus on chromosome 8p21. Sequence analysis of HR gene revealed a single base pair deletion mutation at position 431(431delC) in exon 2, leading to frameshifts and premature termination codon 68 bp downstream in the same exon. In family G, genotyping with microsatellite markers failed to detect linkage to any of the known alopecia / ED locus. In three families (H, I, J) affected individuals had pre-lingual, severe to profound hearing loss, with no associated abnormality. The mode of inheritance of the hearing loss was autosomal recessive. Analysis of the genotypes revealed the linkage of the family H to the DFNB35 on chromosome 14, family I, to the locus DFNB44 on chromosome 7, and family J to the DFNB1 locus on chromosome 13. In family J, sequence analysis of the coding exon of GJB2 gene led to the identification of a G-to-A substitution at nucleotide position 71, resulting in a premature stop codon (W24X). For studying the spectrum of β-thalassemia mutations in the population, 164 β- thalassemia chromosomes obtained from 82 different families were analyzed and nine different mutations [IVS I-5, FSC8/9, FSC-5 (-CT), IVS-I-1(G-T), CD41/42 (-TTCT), IVS-II-848 (C-A) and CD 15 (G-A), CD16 (-C) and CD30 (G-C)] in the β-globin gene were detected. Interestingly, frequencies of these mutations vary among different ethnic groups as well as castes/ tribes.