Abstract
This Study aims to investigate of the effect of different variables of working capital management represented by the ( Average Collection Period , Inventory Turnover in Days , Average Payment Period , Cash Conversion Cycle and Current ratio ), on the Net Operating Profitability in a sample of Industrial Firms which is working in mixed and Private Sector during a period of (10 ) years from 1993 – 2002 . Debt ratio ( Financial Leverage ) , Size of the Firm ( Measured in terms of natural Iogarithm of sales ) and Financial Assets to Total Assets ratio have been used as control variables , Pearsons Correlation and Regression analysis ( Pooled Least Square Method ) , are used as Statistical Tools for analysis purpose This study show that the following Results ; 1- There is a strong negative relationship between variables of the working capital management and profitability of the firm. It means that as the cash conversion cycle increases it will lead to deceasing profitability of the firm and managers can create a positive value for the shareholders by reducing the cash conversion cycle to apossible minimum level . 2 – There is a significant negative relationship between liquidity and profitability . 3 – The study also find that there is a positive relationship between size of the firm and its profitability . 4 - There is also a significant negative relationship between debt used by the firm and its profitability According to that results achieved by the study it suggests some of recommendations that can help in achieving its targeted objectives as the following ; 1 – Improving of the working capital management efficiency in Iraqi industry sector by concentrating on reducing of inventory level in successful method . 2 – Improving the negotiation ability of Iraqi firms with suppliers in order to interesting by financial benefits that provided by the suppliers to your customers . 3 – improving Average payment period by getting more credits from suppliers
