Profitability is mentioned in both business and private investments, and it is of crucial importance that the benefits are higher than the costs. Profitability is the core objective of a company and everybody strives to increase it. Profitability depends on many different factors, both external and internal. In this paper we will deal with one internal factor. The aim of this paper was to analyse the relationship between aggressive and conservative strategies of working capital and profitability. Research has been conducted on over 130 medium-sized companies in Croatia whose area of activity is providing accommodation and preparing and serving food and beverages, and which are, according to activity class, hotels and similar accommodation. The variables return on assets (ROA), the ratio of short-term assets and total assets and the ratio of short-term liabilities and total assets for two years, 2008 and 2015 were observed. Statistical analysis of the collected data was conducted with descriptive, correlation and multiple regression analysis. The analysis of strategies has shown that medium-sized hotel businesses used aggressive investment and conservative financial strategy. The results of correlation analysis for both years have shown that there is a mild positive correlation between the ratio of short-term and total assets and return on assets, and a mild negative correlation between the ratio of short-term liabilities and total assets and return on assets. The models of multiple regression analysis had a poor level of representativeness, but significant p-values. The results of multiple regression analysis, for both years, have shown that the variable ratio of short-term and total assets is significant at 1%, while the variable ratio of short-term liabilities and total assets is not significant. The obtained results can be used for comparison with companies of different sizes, other activity classes, industries, countries of origin and other factors which affect profitability.