3.3 Hypothesis TestingThe objective of this study is to examine the relationship between profitability and working capital management, the study uses the same hypotheses than those used by Raheman & Nasr (2007)Hypothesis 1The first hypothesis of this study is as follows: H01: There is no relationship between effective working capital management and company profitability. H11: There is a relationship between effective working capital management and business profitability. Hypothesis 2 The second hypothesis of the study is the following. H02: There is no relationship between liquidity, size and profitability of companies. H12: There may be a negative relationship between liquidity, size of Pakistani firms and profitability. 3.4 Model specifications: The model used in the study is similar to that used by Raheman & Nasr (2007) which can be specified as: NOP it = β0 + β1 (ACP it) + β2 (ITID it) + β3 (APP it) + β4 (CCC it) + β5 (CR it) + β6 (DR it) +Β7 (LOS it) + β8 (FATA it) + ε (Eq. 3.2) Where: NOP: ACP net operating profitability: Average collection period ITID: Inventory turnover in days APP: Average payment period CCC: Cash conversion cycle CR: Current ratio DR: Debt ratio LOS: Natural logarithm of sales FATA: Financial assets to total assets E: The error term. 4. Results and discussionTwo types of analysis are used, descriptive and quantitative. The results of these analyzes are discussed in this section 4.1 Descriptive analysis Descriptive analysis is the first step of the analysis; it will help describe the relevant aspects of the occurrence of the cash conversion cycle and provide detailed information on each relevant variable. Research has already been conducted in this area of ​​study and a ...... middle of article ...... has a negative coefficient – ​​0.2237. But it is significant at ά. = 5%. This means that if the company is able to reduce this period called the cash conversion cycle, it can increase its profitability. Analyzing the results, it is concluded that if the company is able to reduce these periods, then it is effective in managing working capital. This efficiency will lead to increased profitability. The current ratio is a traditional measure of controlling company liquidity. In this analysis, the current ratio has a significant negative relationship with profitability (measured by net operating profitability). The coefficient is – 0.1357. The result is significant in ά. = 1%. This indicates that the two objectives of liquidity and profitability have inverse relationships. Pakistani businesses therefore need to maintain a balance or compromise between these two measures..