The Influence of Operating Capital and Cash Holding on Firm Profitability

This study analyzes the influence of operating capital on a firm’s profitability in manufacturing sector China. The investigates that develops non-linear relationship with firm by using ordinary least square (OLS), fixed effect (FE), and generalized method moments (GMM) regression. research reveals positive financially less-constrained firms significantly negatively influences profitability. Conversely, negative constrained positively Further, we find design an efficient level holding cash, while cash. Additionally, also identify optimal to increase Generally, conclude can trading-off cash non-cash assets.