Impact of Working Capital Management on Profitability-A Case of National Aluminium Company Limited

Theoretically, it is accepted that working capital management has a very strong impact on the liquidity and profitability of a firm. This study has examined the influences of working capital management on corporate profitability. For assessing the impact of working capital management on the profitability of National Aluminium Company Limited during the period of 6 years, i.e., from 2004–2005 to 2009–2010, Pearson's coefficient of correlation and multiple regression analysis between some ratios relating to working capital management and the important measure relating to profitability ratio (return on investment, ROI) have been computed and applied. An attempt has also been undertaken for measuring the sensitivity of ROI to changes in the level of working capital; and for that working capital leverage has been computed and applied.