Effect of working capital management on profitability of SMEs: evidence from Algeria

الملخص EN

This study aims to analyze the effect of working capital management on profitability of 45 small and medium enterprises in Algeria along the period starting from 2012 to 2019, using the panel data model.

the independent variable was measured using cash conversion cycle, operating cycle, investment in working capital ratio, and working capital turnover.

the results revealed that both cash conversion cycle and operating cycle have a positive significant effect on ROS, where working capital turnover and investment in working capital ratio have non-significant effects on ROS.

therefore, firms should be aware of the importance of achieving their optimal cash conversion cycle that can maximize their value.