Authors: DIMITRIOS AXIOTIS, Alina Hyz, PETROS KALANTONIS, DIMITRIS STAVROULAKIS

Title: Working capital management and firms’ profitability. The case of pharmaceutical companies in Greece

Abstract

This study investigates the relationship between working capital management and firm’s profitability for the period before and after economic crisis. I use a sample of 39 Greek pharmaceutical companies for the period 2005-2014. The purpose of this paper is to determine the effects of working capital management on firm’s profitability. By using a set of testable hypotheses, descriptive statistics, Pearson’s correlation, regression analysis the results showed a negative relationship between profitability and cash conversion cycle components and a positive relationship between profitability cash conversion cycle, sales, growth and leverage. Furthermore the effect of economic crisis is strong on firm’s financial reports. The efficient working capital management from managers creates the right conditions for increasing profitability of pharmaceutical companies.