This thesis studies the relationship between efficient working capital management and firm profitability, and if the global financial crisis has affected the relationship. Previous literature has presented inconsistent results regarding the impact of working capital management on firm profitability, finding both negative and positive effects. It has also been argued that the global financial crisis has increased the attention of and possibly changed the attitude towards working capital management as a strategy in order to increase firm profitability. In the study, the cash conversion cycle is used as a measure for working capital management, and return on assets as a measure for firm profitability. The sample in this thesis consists of 1170 observations from 78 Swedish listed companies over the time-period 2003–2017. Both multiple regression analysis and an independent-sample t-test were conducted in order to examine the given relationship. The findings of this thesis indicate that firms can increase their profitability by implementing efficient working capital management. However, the global financial crisis has not brought a change in companies' working capital management.

This thesis examines the relationship between working capital efficiency and firm profitability, and how this relationship is affected by economic fluctuations. In the existing literature, the relationship between working capital efficiency and firm profitability has been extensively researched. However, the impact of economic fluctuations on the relationship between working capital efficiency and firm profitability is sparsely researched. To the best of our knowledge, only Enqvist, Graham and Nikkinen (2014) have addressed the impact ofeconomic fluctuations on the relationship between working capital efficiency and firm profitability. This thesis is a replication of their study in another geographical setting, another time period and studying different types of firms. Using a sample of 2,589 firm-year observations of listed Swedish firms for the years 2000-2015, this thesis conducts multiple regression analysis to examine the relationship between working capital efficiency and firm profitability. The findings of this thesis propose that firms can enhance profitability by improving their working capital efficiency. However, the relationship between working capital efficiency and firm profitability does not appear to be significantly affected by economic fluctuations. This thesis contributes to the existing literature by further strengthening the understanding of the relationship between working capital efficiency and firm profitability. In addition, it also adds to the existing literature on the relationship between working capital efficiency and firm profitability in a Swedish context.