the procedure and format requirements led by the Faculty of Management Siam

The procedure and format requirements led by the

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the procedure and format requirements led by the Faculty of Management, Siam University, as partial fulfillment of the requirements for the award of the degree of Bachelor of Business Administration (BBA). I, therefore, recommend the research report for evaluation. Signature: Bikash Shrestha Kathmandu College of Management Date: 11-12-2018
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WORKING CAPITAL AND PROFITABILITY 4 Endorsement We, hereby endorse the research report entitled “Working Capital Management and Profitability”, submitted by Priya Shrestha; Rishi Agrawal; Dhriti Shah; Sakshi Pant; Maogya Shrestha of Kathmandu College of Management, Lalitpur, in partial fulfillment of the requirements for award of the Bachelor of Business Administration (BBA), Finance and Banking for external evaluation. Signature: Bishnu Raj Adhikari Kathmandu College of Management Date: 11-12-2018
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WORKING CAPITAL AND PROFITABILITY 5 Table of Contents Abstract ................................................................................................................................ 7 Statement of Problem .......................................................................................................... 9 Objectives of the study ....................................................................................................... 11 Significance of the study .................................................................................................... 11 Organization of the study ................................................................................................... 12 Review of Literature .......................................................................................................... 14 Related theory ................................................................................................................ 14 Empirical Literature Review .......................................................................................... 14 Theoretical framework ................................................................................................... 20 Hypotheses of the study ................................................................................................. 20 Research Methodology ...................................................................................................... 22 Research design ............................................................................................................. 22 Population and sample of the study ............................................................................... 23 Nature and sources of data ............................................................................................. 23 Definitions of variables .................................................................................................. 24 Statistical tools used ...................................................................................................... 26 Presentation and Analysis of Data ................................................................................. 28 Analysis of data ............................................................................................................. 28 Limitations ..................................................................................................................... 31
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WORKING CAPITAL AND PROFITABILITY 6 Findings and Conclusion ................................................................................................... 32 Managerial Implication ...................................................................................................... 33 Bibliography ...................................................................................................................... 35 Annexures .......................................................................................................................... 37 Annex 1: Tables ............................................................................................................. 38 Annex 2: Figures ............................................................................................................ 46
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WORKING CAPITAL AND PROFITABILITY 7 Abstract Profitabilit y is the ability of a business to earn a profit. Profitability is in sync with working capital management. That's why working capital decision is of noteworthy concern for any firm irrespective of its type and size. Therefore, one of the major goals in current strategic management is to identify the optimal working capital. The intention of this study is to examine the relationship between current ratio, inventory turnover ratio and cash conversion cycle and Return on Assets of firms and profitability measured by net profit (NP) of listed manufacturing companies of Nepal over the past FY 66/67 to FY 73/74. The data has been analyzed by using descriptive statistics, correlation and regression analysis. We found that ITR and CCC have insignificant positive relationship with NP i.e. 0.43 and 0.16 respectively and that there is significant negative relationship between CR and NP i.e. -0.5 at 0.05 level of confidence interval. In our study, we concluded that ITR has significant positive impact on ROA. Keywords : working capital, profitability, cash conversion cycle, return on assets.
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WORKING CAPITAL AND PROFITABILITY 8 Working Capital Management and its Effect on Profitability Every business requires working capital for its survival. Working capital is a vital part of business investment which is essential for continuous business operations. It is required by a firm to maintain its liquidity, solvency and profitability. Business plays a
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