Thus, this study examined the impact of working capital management on firms‟ performance by
using audited financial statements of a sample of 11 metal manufacturing private limited companies
in Addis Ababa, Ethiopia for the period of 2008 to 2012. The performance was measured in terms of
profitability by return on total assets, and return on investment capital as dependent financial
performance (profitability) variables. The working capital was determined by the Cash conversion
period, Accounts receivable period, inventory conversion period and accounts payable period are
used as independent working capital variables. Moreover, the traditional measures, current ratio
are used as liquidity indicators, firm size as measured by logarithm of sales, firm growth rate as
measured by change in annual sales and financial leverage as control variables.