Abstract:

This study seeks to assess the working capital management of commercial banks in Afghanistan. Time series data from 2012 to 2017 have been extracted from the financial statement of the banks, and descriptive statistics, financial analysis techniques and ratios, correlation analysis and regression have been used to determine how working capital affect profitability. Contrary to most previous empirical works, the findings of this study show that working capital management effectively influences the profitability of commercial banks. Equity capital growth has a significantly positive relationship with banks profitability (Return on Equity) whiles working capital, and short-term debt exhibits a significantly negative relationship with the bank’s profitability only in three banks (Azizi Bank, First Micro Finance Bank, and Maiwand Bank) and its insignificant in case of other banks.

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