Journal of Finance & Banking Studies 7(1), 2018: 27-32 Page27 Finance & Banking Studies IJFBS, VOL 7 NO 1 ISSN: 2147-4486 Contents available at www.ssbfnet.com/ojs https://doi.org/10.20525/ijfbs.v7i1.837 Impact of working capital management on profitability of Industrial sector in Iraq Sardar Shaker Ibrahim Financial accounting techniques, Duhok Polytechnic University, Duhok, Iraq Abstract This paper observes the impact of working capital management on profitability of industrial sector in Iraq. Four companies based in Iraq namely: Iraqi Date processing, Iraqi carton manufactories, Baghdad soft drinks and Iraqi for tufted carpets randomly selected and analyzed for the present study over the period 2007 to 2016. Annual reports of these companies have been studied and significant ratios calculated. The variables that were identified as independent for working capital were, current ratio and quick ratio, while return on equity ROE as dependent variable for profitability. The Ordinary Least Square (OLS) model used to examine the impact of working capital management on profitability. Results indicate that ROE is positively related with working capital variables. Keywords: Working Capital; Profitability; Current Ratio; Quick Ratio JEL classification: G17; G21 Introduction Recently, an important component of corporate financial management is the management of working capital, because they may effect on firm’s profitability, risk and its value. Qazi et al. (2011) mention that an important factor in financial management is working capital management. Similarly, Smith (1980, cited in Rizwan and Shah, 2015) believes that “(WCM) plays a key role in financial management as its effects on firms performance, risk and thus on its value”. Working capital is the difference between current assets and current liabilities. This study is aimed to find out the impact of working capital management on profitability in the four Iraqi industrial companies namely Baghdad soft drinks, Iraqi Carton Manufactories, Iraqi Date Processing and Marketing, and Iraqi For Tufted Carpets over the period of 2007 to 2016. In this study, the impact of working capital management on profitability of industrial sector in Iraq has been questioned. The majör hypotheses were formulated for the study based on the literature review following the introduction part of the paper: H 0 :- Working capital management has a negative impact on the profitability of industrial sector in Iraq and H 1 :- Working capital management has a positive impact on the profitability of industrial sector in Iraq. This study is organized as follows. Following the introduction part of this study, major researches in the field have been assessed based on the the effects of working capital management on the profitabililty of industrial sector in Iraq. The third part is the research and findings of this study. Implications are made in the next section. Finally the conclusion of this research paper will been underlined.