Thus, without doubt, it is imperative for Malaysian analyst to conduct a further study on working capital management, in the field of manufacturing domain.
Based on the Department of Innovation, Industry, Science & Research (DIISR) data from Australia, about half of its total 294 manufacturing firms reported bankruptcy status after the financial crisis in 2008.
Mathuva  finds that there is a positive relationship between independent variables, which are measured by average payment period and inventory turnover with firm’s profitability.
This study runs contrary to findings from Deloof , Falope and Ajilore , which suggest that there is a significant negative relationship between profitability and the inventory turnover.
To become a major contributor to the economic growth of a country, this sector is certainly expected to be well-managed in order to remain efficient and viable.
Therefore, this research paper is carried out to investigate how the working capital in the manufacturing sector in Malaysia is managed towards attaining profitability.It will also help them to know the optimal level of receivables and inventory level which will be useful for their receivable and inventory control management.Besides, this study is also useful for selected industries’ manager, who are anticipated to understand which working capital and corporate finance theory that should actually be adopted by them.The empirical result of this study will benefit the owner and management of the manufacturing firms, to understand the liquidity-performance relationship much better, in order for the management to maintain an appropriate level between liquidity and profitability so as to ensure that the business will function more effectively.They would be expected to know at what extent they should maintain firm’s liquidity in order to achieve a satisfactory level of firm’s performance.Thus, this research paper is conducted in order to find the appropriate proxy for exogenous variables that will impact the firm’s profitability.Similarly it is also found that few studies have been conducted by researcher in Malaysia to determine the impact of working capital management on profitability, particularly in the manufacturing sector, which serves as the second largest sector contributing to Malaysia economy.However, there is an evidence of positive and significant relationship between the average collection period, inventory conversion period and its profitability.Similarly, this research study also reported that the size of firms has a significant positive relationship with profitability of firms.Similarly, the impact was also widely felt in Malaysia.According to Bank Negara Malaysia report, the gross domestic product (GDP) contributed from the manufacturing export demand, declined by 8.8% in the fourth quarter of 2008; reported a negative growth of 17.6% in the first quarter of 2009 and, finally, a negative 14.5% in the second quarter of 2009.