Influence of working capital management on business profitability
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Abstract
Working capital is relevant in business management, since it provides firms with the necessary resources to carry out their regular operations, seeking efficient management that helps generate higher levels of profitability. The purpose of this research is to determine the efficiency in the management of working capital and its relationship with profitability in companies of the textile business sector of Ecuador, and their evolution over time. Through a quantitative analysis methodology, by means of panel data, the relationship between efficiency in the management of working capital and profitability is studied, according to size of 425 companies. It is evident that the firms that used their working capital more efficiently to generate sales were the small companies and microenterprises. Small companies show a positive relationship between the study variable and ROA, which shows that having greater efficiency in the management of working capital allows firms to obtain higher levels of profitability.
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