Working capital management: Analysis of profitability during the Covid -19 pandemic of multinational and local pharmaceutical companies of Pakistan

The goal of current study was to analyze profitability and working-capital-management of the multinational and local pharmaceutical companies of Pakistan during the pre, concurrent and post-COVID-19 era. Cross-sectional-survey was conducted from January-2016 to December-2023. Data was collected from multinational-pharmaceutical-companies (MPC) and national-pharmaceutical-companies (NPC). The data was collected by questionnaire; verified by annual-reports of companies and also from the Karachi-Stock-Exchange and analyzed by ordinary-least-square (OLS) regression-analysis. Despite the challenges of COVID-19 pandemic, MPC achieved its highest growth with 21% increase in 2021 versus 2020. Similarly, NPC attained its highest increase of 38% in 2022 versus 2021. Pearson-correlation-coefficient (r) and regression-coefficient (r2) in between era (2016 to 2023) and net-sales of MPC (r=0.972; r2=0.944; p=0.0014) and NPC (r=0.992; r2=0.984; p=0.0321); in between era (2016 to 2023) and gross-profit of MPC (r=0.682; r2=0.465; p=0.022) and NPC (r=0.963; r2=0.927; p=0.01); in between era (2016 to 2023) and % net-profit of MPC (r=0.054; r2=0.00291; p=0.082) and NPC (r=0.044; r2=0.00193; p=0.059); in between era (2016 to 2023) and % return-on-assets of MPC (r=0.216; r2=0.0466; p=0.051) and NPC (r=0.077; r2=0.0059; p=0.901). COVID-19 period has provided an opportunity for pharmaceuticals to enhance profitability. Working-capital-turnover and inventory-turnover have negative impact on profitability of both companies.