Working capital management and corporate profitibality

Abstract

This study aims to analyse the relationship between working capital management and corporate profitability with a sample of non-financial Belgian companies. Moreover, the impact of industry-specific effects, business cycle phases and the ownership nature (publicly quoted or privately owned) will also be assessed. Thanks to correlation coefficients and ordinary least squares regressions analyses, an inverted U-shape type of linkage has been identified between working capital management and corporate profitability. Industries, business cycle phases and ownership nature also seem to affect the relationship previously mentionned.