THE IMPACT OF EFFICIENCY MANAGEMENT ON THE PROFITABILITY OF THE FIRMS: TEXTILE COMPOSITE SECTOR
The objective of this study is to find out the impact of efficiency management on the performance of the textile firms of Pakistan. Efficiency management is considered an independent part, consisting of receivable turnover, payable turnover, inventory turnover, total asset turnover, capital employed turnover, cash turnover, fixed asset turnover, and working capital turnover while performance is dependent on efficiency, and measured by return on asset. 31 textile composite companies registered in PSX are the scope and date are taken from their financial reports for the period of (2015-2019) five years. Panel regression test is used to fulfill the objective of this research through E-Views. Statistics of the results show that receivable turnover, inventory turnover, and capital employed turnover has a significant and positive impact on a firm’s performance while payable turnover, total asset turnover, fixed asset turnover, working capital turnover, and cash turnover have an insignificant impact on a firm’s performance. After analyzing the results, it was suggested firm’s management focus on receivables, inventory, and employment of capital. Through proper management of these three factors firms can enhance their performance, earn more profits, and can maximize their capital in the textile composite industry.
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