The Impact of Liquidity Management on Profitability of Listed Oil & Gas Company
DOI:
https://doi.org/10.47067/real.v8i2.419Abstract
This research aims to study how effective management of cash reserves affects an oil and gas company's earnings. This research focuses on analyzing liquidity management because its connection to business profits. Company determines their profits through both assets return and equity measures. Liquidity management reveals if a company can fulfill its financial responsibilities while showing how products make money for the business which is why companies must handle this process effectively. Through our analysis we selected liquidity metrics including DSO, DPO, DIO and current assets alongside key dependent factors return on assets and return on equity. We study the connection between these measures and their influence on company earnings.
References
Al Dalayeen, B. (2017), Working capital management and profitability of real estate industry in Jordan: an empirical study, Journal of Applied Finance and Banking, Vol. 7 No. 2, pp. 49-55
Alvarez, T., Sensini, L. and Vazquez, M. (2021), Working capital management and profitability: evidence from an emergent economy, International Journal of Advances in Management Economics, Vol. 10 No. 1, pp. 32-39.
Ahmed, M., Kumar, N., & Maqsood, H. (2025). Taxation and Investor Behavior: Analyzing Portfolio Adjustments, Risk Preferences, and Capital Market Reactions to Fiscal Policy Changes. Journal of Business and Management Research, 4(2), 1-26.
Ahmed, M., Kumar, N., & Hussain, Y. (2025). Tax Reforms and Economic Growth: A Longitudinal Analysis of Fiscal Policies, Financial Stability, and Market Competitiveness. Research Journal for Social Affairs, 3(2), 425-440.
Amponsah-Kwatiah, K. and Asiamah, M. (2020), Working capital management and profitability of listed manufacturing firms in Ghana, International Journal of Productivity Performance Management, Vol. 21 No. 4, pp. 81-89.
Arnaldi, A., Novak, B., Roscigno, R. and Zhang, W. (2021), Working capital management and profitability: empirical evidence, International Journal of Business Management and Economic Research, Vol. 12 No. 2, pp. 1911-1917.
Aytac, B., Hoang, T.H.V., Lahiani, A. and Michel, L. (2020), Working capital management and profitability of wine firms in France: an empirical analysis, International Journal of Entrepreneurship Small Business, Vol. 41 No. 3, pp. 368-396.
Banos-Caballero, S., Garc?a-Teruel, P.J. and Mart?nez-Solano, P. (2014), “Working capital management, corporate performance, and financial constraints”, Journal of Business Research, Vol. 67 No. 3, pp. 332-338
Bhattacharya, H. (2014), Working Capital Management: Strategies and Techniques, PHI Learning Pvt. Bieniasz, A. and Go?as, Z. (2011), “The influence of working capital management on the food industry enterprises profitability”, Contemporary Economics, Vol. 5 No. 4, pp. 68-81.
Brigham, E.F. and Houston, J.F. (2009), Fundamentals of Financial Management, Concise Edition, Cengage Learning
Chowdhury, A.Y., Alam, M.Z., Sultana, S. and Hamid, M. (2018), “Impact of working capital management on profitability: a case study on pharmaceutical companies of Bangladesh, Journal of Economics, Business Management, Vol. 6 No. 1, pp. 27-35.
Cristian, M.M. and Raisa, M.L. (2017), Working capital management and firm profitability, Empirical Evidence for the Romanian Industry, Ovidius University Annals, Economic Sciences Series, Vol. 17 No. 2, pp. 425-429.
Deloof, M. (2003), Does working capital management affect profitability of Belgian firms? Journal of Business Finance Accounting, Vol. 30 Nos 3-4, pp. 573-588.
Ehrhardt, M.C. and Brigham, E.F. (2011), Financial Management: Theory and Practice-3rd, South Western Cengage Learning
Enow, S.T. and Brijlal, P. (2014), The effect of working capital management on profitability: the case of Small Medium and Micro Enterprises in South Africa, The Journal of Accounting and Management, Vol. 4 No. 2, pp. 5-11.
Enqvist, J., Graham, M. and Nikkinen, J. (2014), The impact of working capital management on firm profitability in different business cycles: evidence from Finland, Research in International Business and Finance, Vol. 32 No. 5, pp. 36-49
Firmansyah, J., Siregar, H. and Syarifuddin, F. (2018), Does working capital management affect the profitability of property and real estate firms in Indonesia? Journal Keuangan Dan Perbankan, Vol. 22 No. 4, pp. 694-706.
Gill, A., Biger, N. and Mathur, N. (2011), The effect of capital structure on profitability: evidence from the United States, International Journal of Management, Vol. 28 No. 4, p. 3.
Gonçalves, T., Gaio, C. and Robles, F. (2018), The impact of Working Capital Management on firm profitability in different economic cycles: evidence from the United Kingdom, Economics Business Letters, Vol. 7 No. 2, pp. 70-75.
Gorondutse, A.H., Ali, R., Abubakar, A. and Naalah, M.N. (2017), The effect of working capital management on SMEs profitability in Malaysia, Polish Journal of Management Studies, Vol. 16 No. 5, pp. 89-97.
Hogerle, B., Charifzadeh, M., Ferencz, M. and Kostin, K. (2020), The development of working capital management and its impact on profitability and shareholder value: evidence from Germany, Strategic Management, Vol. 25 No. 2, pp. 27-39.
Hsieh, C. and Wu, C.Y. (2013), Working capital management and profitability of publicly traded Chinese companies, The Asia Pacific Journal of Economics Business, Vol. 17 Nos 1/2, pp. 1-7.
Jakpar, S., Tinggi, M., Siang, T., Johari, A., Myint, K. and Sadique, M. (2017), Working capital management and profitability: evidence from manufacturing sector in Malaysia, Journal of Business & Financial Affairs, Vol. 6 No. 2, pp. 1-9
Jayarathne, T. (2014), Impact of working capital management on profitability: evidence from listed companies in Sri Lanka, Proceedings of the 3rd International Conference on Management and Economics: Citeseer, pp. 269-274.
Kasozi, J. (2017), The effect of working capital management on profitability: a case of listed manufacturing firms in South Africa, Investment Management Financial Innovations, Vol. 14 No. 2, pp. 336-346.
Khan, A. and Choudhary, A. (2020), Effect of working capital management on profitability of Bharti Airtel limited, Asian Journal of Management, Vol. 11 No. 1, pp. 92-96.
Kumar, N., Khoso, I., & Shah, A. (2023). The Impact of Corporate Social Responsibility on Financial Performance: Evidence from the Listed Banks in Pakistan. Journal of Peace, Development and Communication, 7(01).
Laghari, F. and Chengang, Y. (2019), Investment in working capital and financial constraints, International Journal of Managerial Finance, Vol. 4 No. 2, pp. 17-23
Mathuva, D. (2015), The Influence of working capital management components on corporate profitability, Journal of Business & Financial, Vol. 4 No. 2, pp. 45-51.
Mehtap, O. (2016), “The impact of working capital management on firm profitability: empirical evidence from Borsa Istanbul”, Siyaset Ekonomi ve Y€onetim Aras¸t?rmalar? Dergisi, Vol. 4 No. 3, pp. 63-79.
Muhammad Usman, S.A.S. and Khan, S. (2017), “Impact of working capital management on firm profitability: evidence from Scandinavian countries, Journal of Business, Vol. 11 No. 1, pp. 99-112.
Nastiti, P.K.Y., Atahau, A.D.R. and Supramono, S. (2019), Working capital management and its influence on profitability and sustainable growth, Business: Theory Practice, Vol. 20 No. 4, pp. 61-68.
Newbold, P., Carlson, W.L. and Thorne, B. (2013), Statistics for Business and Economics, Pearson, Boston, MA.
Nguyen, A.H., Pham, H.T. and Nguyen, H. (2020), Impact of working capital management on firm’s profitability: empirical evidence from Vietnam, The Journal of Asian Finance, Economics, and Business, Vol. 7 No. 3, pp. 115-125.
Olaoye, F., Adekanbi, J. and Oluwadare, O. (2019), Working capital management and firm’s profitability: evidence from quoted firms on the Nigerian stock exchange, Intelligent Information Management, Vol. 11 No. 3, pp. 43-60.
Osazevbaru, H.O., Aruoren, E.E. and Okunima, P. (2021), Measuring the effect OF working capital management on firm’s profitability: evidence from quoted Nigerian companies, International Journal of Management, Vol. 12 No. 3, pp. 133-142.
Pais, M.A. and Gama, P.M. (2015), Working capital management and SMEs profitability: Portuguese evidence, International Journal of Managerial Finance, Vol. 8 No. 4, pp. 65-71.
Panigrahi, C. (2012), Impact of working capital management on profitabilityA case study of ACC Ltd, Asian Journal of Management, Vol. 3 No. 4, pp. 27-33.
Qatar Stock Exchange website (2015-2019), Annual reports of manufacturing companies, available at: https://www.qe.com.qa/ar/financial-statements (accessed March 2021).
Rey-Ares, L., Fernandez-Lopez, S. and Rodeiro-Pazos, D. (2021), Impact of working capital management on profitability for Spanish fish canning companies, Marine Policy, Vol. 130 No. 8, p. 104583.
Sarwat, S., Iqbal, D., Durrani, B.A., Shaikh, K.H. and Liaquat, F. (2017), Impact of working capital management on the profitability of firms: case of Pakistan’s cement sector, Journal of Advanced Management Science, Vol. 5 No. 3, pp. 33-39.
Sensini, L. and Vazquez, M. (2021), Effects of working capital management on SME profitability: evidence from an emergent economy, International Journal of Business Management, Vol. 16 No. 4, pp. 85-95.
Singhania, M. and Mehta, P. (2017), Working capital management and firm’s profitability: evidence from emerging Asian countries, South Asian Journal of Business Studies, Vol. 6 No. 4, pp. 39-45.
Subramanyam, K. (2014), Financial Statement Analysis, McGraw Hill Education. Tsagem, M.M., Aripin, N. and Ishak, R. (2015), Impact of working capital management, ownership structure and board size on the profitability of small and medium-sized entities in Nigeria, International Journal of Economics and Financial, Vol. 5 No. 5, pp. 77-83.
Vukovic, B. and Jaksic, D. (2019), The effect of working capital management on profitability: evidence from southeast Europe”, ????????? ??????????v?, Vol. 66 No. 1, pp. 55-63
