Abstract:
working Capital management is to ensure that the firm has adequate working capital for its
opration, neither too much not too little. Investing heavily in current assets will drain the
lll'lll'ti comings and inadequate investment in current assets will reduce the firm's credibility
UN It ulYccts the firm's liquidity. Working Capital Management has its effect on liquidity as
Well as on Earnings of the company. A company's earnings is determined mainly by way of
as working capital management. The efficient management of working capital is likely to
yield significant results and its neglect can be highly dangerous to the any company. The
purpose of this paper is to examine the relationship between Working Capital management
tiiid eurnings. The dependent variable, ROE, ROl and EPS are used as a measure of earnings
ilinl the relationship between working capital management and earnings is investigated for a
wimple of forty companies which are listed in CSE, using the secondary quantitative data
wmlysis for the period 2006-20 lO.The independent variables used in the analysis are
ACI\AIP,APP and CCC. Correlation and simple regression analysis are used for analysis.
Through this analysis all the Working capital management components have no significant
ivlalionship with earnings in Sri Lanka.
