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1
P., Kamalnath. "Operating Cycle Management: An Empirical Investigation in Maruti Suzuki India Limited (MSIL)." RESEARCH REVIEW International Journal of Multidisciplinary 03, no. 11 (2018): 475–77. https://doi.org/10.5281/zenodo.1495103.
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In the paper, an effort made to analyses the operating cycle of Maruti Suzuki India limited (MSIL). Such, an analysis is helpful to understanding of how many days take to inventory outstanding, sales outstanding, payment outstanding and cash conversion cycle.
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Syed, Md. Khaled Rahman, and Ahmed Salman. "Impacts of Working Capital Management on Profitability: A Comparative Study on Cement and Tannery Industry of Bangladesh." International Journal of Management, Accounting and Economics 8, no. 2 (2021): 82–102. https://doi.org/10.5281/zenodo.5068371.
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Short term asset and liability management is significant in corporate finance literature. This paper investigated on the impacts of working capital management (WCM) on profitability of listed companies of cement and tannery industry in Bangladesh. The data of companies has been collected from Dhaka Stock Exchange over the period 2008-2017. Five firms were chosen from each industry by applying simple random sampling method. Study found that WCM has significant impact on profitability. Result revealed that if average payment period, and cash conversion cycle increase it leads to decrease in all four profitability ratios of cement industry’s firms. Cash conversion cycle has significant negative impact on ROE while current ratio (CR) has significant positive effect on NPM. In contrast, tannery industry impacted by days sales outstanding (DSO) negatively. More inventory turnover has reduced ROE & ROCE while stretching payables reduced ROA & NPM. DSO has significant negative and CR has significant positive impact on NPM of tannery industry’s firms. The managers can increase their companies’ profitability by reducing the days sales outstanding, days inventory turnover, cash conversion cycle and average payment period. The study has practical and policy implications for corporate managers, suppliers, customers, and competitors as enhanced profitability has direct and indirect effect on all stakeholders.
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Widya Pratiwi, Dwi, Nurzi Sebrina, and Halmawati Halmawati. "Manajemen Aliran Kas Dan Dampaknya Terhadap Nilai Perusahaan." JURNAL EKSPLORASI AKUNTANSI 2, no. 1 (2020): 2142–61. http://dx.doi.org/10.24036/jea.v2i1.204.
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This study aims to determine the effect of cash flow management on firm Value. Researchers tested manufacturing companies listed on the Indonesia Stock Exchange in 2017-2018 with a total sample of 101 samples using a purposive sampling method. In this study, the firm’s value is measured using Tobin's Q ratio. Analysis technique used Panel EGLS (Cross-section random effects) analysis. The first model investigates of the three component cash flow measures (days of sales outstanding, days of inventory outstanding and days of payable outstanding), and the last two models investigate the cash conversion cycle and operating cash cycle metrics, respectively. Thechange (Δ) in one variable for period t is that measured by the differences between at the end of the quarter and at the end of the previous quarter’s value. The results showed that days of sales outstanding, days of inventory outstanding, cash conversion cycle and operating cash cycle have a significant effect on firm value.
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Md Aris, Nazaria, Brenda Nu Minggu, Yuin Weng Tan, Pei Jia Lim, and Ahmad Syubaili Mohamed. "CASH CONVERSION CYCLE EFFECTS ON PROFITABILITY OF MALAYSIAN PLANTATION SECTOR." UNIMAS Review of Accounting and Finance 7, no. 1 (2023): 14–27. http://dx.doi.org/10.33736/uraf.5115.2023.
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The cash conversion cycle (CCC) is a crucial indicator in determining how efficiently a firm can turn its inventory into sales and subsequently into cash. Data from 43 firms listed in Bursa Malaysia from 2016 to 2019 were used to study the relationship between the CCC and profitability. The determinants for CCC are the days sales outstanding (DSO), days payables outstanding (DPO), and days inventory outstanding (DIO) while profitability is represented by the return on assets (ROA) of the firms. The data were collected from the published annual reports and audited financial statements of the local plantation firms and analyzed using EViews version 10. The result reported that DSO positively influences profitability significantly. DIO also reported a positive influence on profitability but the relationship is insignificant. On the other hand, DPO has an adverse effect on profitability and the relationship is insignificant. The findings provide useful information for the Malaysian government, investors, and policymakers in developing effective policies, rules, or regulations to promote economic productivity, growth, and the best plantation financing decision.
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Lin, Wang-Tzu, Min-Sun Horng, and Jian-Hsin Chou. "Relationship of cash conversion cycle and PRGap with firm performance: an empirical study of Taiwanese companies." Investment Management and Financial Innovations 13, no. 3 (2016): 293–99. http://dx.doi.org/10.21511/imfi.13(3-2).2016.01.
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The study investigates how working capital management (WCM) impacts the profitability and operating performance of publicly traded companies in Republic of China, Taiwan. The authors use the quarterly data of 539 stocks listed on the Stock Exchange of Taiwan from 2008 to 2015, containing 17,248 observations. The study examines whether two WCM variables, namely, the cash conversion cycle (CCC), as well as the gap between days of payables outstanding and days of sales outstanding (PRGap) have any significant effects on firm profitability and operating performance. The findings demonstrate that there are significantly negative relationships between the CCC and performance indicators, whereas there are consistent positive relationships between PRGap and performance indicators. Keywords: working capital management, performance, cash conversion cycle, PRGap, Tobin’s Q. JEL Classification: G30, G31, G32, M10
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Oktavianus Yusan, Budi, and Sarwo Edy Handoyo. "Effect of Cash Conversion Cycle on Company Profitability: A Study on Indonesian Food and Beverage Listed Companies." International Journal of Management Science and Application 3, no. 1 (2023): 24–42. http://dx.doi.org/10.58291/ijmsa.v3i1.146.
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The Indonesian Food and Beverage industry is a dynamic and pivotal sector in the Indonesian business ecosystem, contributing significantly to the nation's economic growth and reflecting its cultural diversity. This paper delves into the relationship between the Cash Conversion Cycle and the profitability of Indonesian Food and Beverage listed companies. By examining this intricate connection, the study aims to provide valuable insights for financial managers, policymakers, investors, and researchers within this sector. This study used panel data regression with a purposive sampling method with a total of 687 samples that spans from 2007 until 2022. Data processing in this study uses Eviews 9. The research adopts Gross Profitability as a precise measure closely linked to working capital management and tests hypotheses related to the Cash Conversion Cycle components, including Days of Inventory Outstanding, Days of Sales Outstanding, and Days of Payable Outstanding. The findings reveal that Days of Sales Outstanding significantly and negatively impacts Gross Profitability, emphasizing the importance of efficient accounts receivable collection for profitability. Days of Inventory Outstanding, while marginally significant, also shows a negative association with Gross Profitability. In contrast, Days of Payable Outstanding does not exhibit statistical significance in explaining variations in Gross Profitability. These insights provide valuable guidance for managers in optimizing working capital management. Moreover, the paper recommends future research directions, including long-term analysis, industry-specific exploration, the influence of macroeconomic factors, comparative studies, and qualitative research to deepen our understanding of the Cash Conversion Cycle 's role in the Indonesian Food and Beverage industry and enhance financial management practices.
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Lawrence, U. Egbadju. "Cash Management and Financial Performance of Quoted Non- Financial Firms in Nigeria: A Dynamic Robust Least Squares Regression Approach." Journal of Accounting and Financial Management 9, no. 8 (2023): 81–96. http://dx.doi.org/10.56201/jafm.v9.no8.2023.pg81.96.
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This study investigates the impact which cash management and the financial performance of selected firms in Nigeria. The period which the study covers is from 2005 to 2020 of 76 non- financial firms quoted on the floor of the Nigerian Exchange Group the information about them are extracted from their financial statements. The results of the dynamic robust least squares indicated that while cash and cash equivalence (CCE), average collection period (ACP), days sales outstanding (DSO), days inventory outstanding (DIO) and sales growth (GSALES) are positively significant with economic value added (EVA); cash conversion cycle (CCC), average payment period (APP), days payment outstanding (DPO), quick ratio (QR), short term debt (STD) and capital expenditures (CAPEX) are negatively significant with it. The study concludes with some recommendations.
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Muhammad, Matin Khan, Ismail Hossain Shagor Md., Kalam Abu, and Sojib Ahmed Md. "Working Capital Management and Firm Profitability in the Textile Industry of Bangladesh." International Journal of Science and Business 4, no. 7 (2020): 118–27. https://doi.org/10.5281/zenodo.3935735.
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This paper has been conducted to examine the connection between working capital management measured and profitability performance is measured. The study is conducted based on secondary data from annual reports of respective textile firms listed in DSE and DSE monthly reviews. From 2000 to 2018. The objective of the study is to find out the working capital devoted to the firms registered in the Dhaka stock exchange and find the connection of their performance and working capital capitalized in registered textile firms in DSE. To address this panel data, besides ratio and quartile study, Hausman test, variance inflation test, and fixed effect regression was done for testing all the hypotheses and the study result shows the inverse association with age and payment deferred period but a positive association with fixed asset turnover, cash conversion cycle, days sales outstanding, inventory conversion period, sponsor shareholdings and total assets. It also suggests to produce an effective policy must be produced for each company for each component of working capital. Besides, well-organized management and financing of working capital can upsurge the operating profit of a textile firm. Shorter cash conversion cycle, days sales outstanding, and the inventory conversion period can increase firms' profit. These are some practical examples of working capital management.
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Agustiyana, Rahma Ayu. "Working Capital Management and Profitability of Manufacturing Public Company in Indonesia." JURNAL STUDI MANAJEMEN ORGANISASI 17, no. 2 (2022): 49–57. http://dx.doi.org/10.14710/jsmo.v17i2.39217.
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Abstract. This research studied the causative link between working capital management (WCM) and return on assets (ROA) in consumer goods companies listed on The Indonesian Stock Exchange. Days Sales of Inventory (DSI), Days Sales Outstanding (DSO), Days Payable Outstanding (DPO) and Cash Conversion Cycle (CCC) were used as WCM metrics. The study was based on micro-data for 39 consumer goods companies with period from 2015 – 2019. By using multiple regression and correlations analysis, the study shows that extending DSO and DPO had a profitable impact on ROA and extending the DSI and CCC had an adverse impact on ROA in consumer goods companies. Keywords : consumer goods industry, profitability, working capital management
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Mandalaputri, Renata, Sylvia Fettry, and Felisia Felisia. "THE EFFECT OF CASH CONVERSION CYCLE ON THE PROFITABILITY OF THE RETAIL TRADE SECTOR COMPANIES." Riset 3, no. 2 (2021): 501–20. http://dx.doi.org/10.37641/riset.v3i2.77.
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One of the company's goals is to increase company value. In order to achieve these goals the company must increase its profitability. To increase profitability, companies have to manage working capital effectively and efficiently. The effectiveness of working capital management can be measured using the Cash Conversion Cycle (CCC). CCC consists of Days Sales Outstanding (DSO), Days Sales Inventory (DSI), and Days Payable Outstanding (DPO). This study aims to determine the effect of the CCC and its components on company profitability. The type of data used in this study is secondary data which are collected from of corporate financial reports. The population in this study are retail trading companies listed on the Indonesia Stock Exchange during the 2015-2019 period. The data analysis method used in this study is the multiple linear regression method for panel data and simple linear regression for panel data. The results showed that partially, DSO, DSI, and CCC had a negative effect on company profitability. Meanwhile, the DPO has a positive effect on company profitability. Simultaneously, DSO, DSI, and DPO have an effect on profitability. Therefore, companies need to pay attention to the CCC and its components (DSO, DSI, and DPO) and manage it properly.
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Gołaś, Zbigniew. "Impact of working capital management on business profitability: Evidence from the Polish dairy industry." Agricultural Economics (Zemědělská ekonomika) 66, No. 6 (2020): 278–85. http://dx.doi.org/10.17221/335/2019-agricecon.
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The main purpose of this paper was to examine the causative link between Working Capital Management (WCM) and Return On Assets (ROA) in milk processing companies. Days Sales of Inventory (DSI), Days Sales Outstanding (DSO), Days Payable Outstanding (DPO) and the Cash Conversion Cycle (CCC) were used as WCM metrics. The study was based on micro-data for Polish dairy companies from 2008–2017, retrieved from the Emerging Markets Information Service (EMIS) database. Based on panel regression models, it was demonstrated that extending the DSI and CCC had an adverse effect on ROA, whereas extending the DSO and DPO had a beneficial impact on ROA in dairy companies. Such relationships were mostly characteristic of SMEs which form the largest group of businesses in Poland.
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Poudel, Phadindra Kumar, and Pujan Maharjan. "Effects of Working Capital Management on Profitability: A Case of Nepalese Manufacturing Firms." International Research Journal of Management Science 5, no. 1 (2021): 130–47. http://dx.doi.org/10.3126/irjms.v5i1.35869.
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The study deals with the relationship between firm characteristics of working capital management and firm profitability in Nepal. It examines if firm performance, return on assets is related to cash conversion cycle, days’ sales outstanding, days’ inventory outstanding and current ratio. The study is based on pooled cross-sectional data of 10 non-financial firms from 2071/72 to 2075/76 of listed firms in the Nepal Stock Exchange. The study employed descriptive and causal-comparative research design to attainthe purpose of this study. The result reveals that the current ratio has a positively significant relationship with profitability and days’ sale outstanding has negatively significant relationship with the financial performance of the firm.
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Poudel, Phadindra Kumar, and Pujan Maharjan. "Effects of Working Capital Management on Profitability: A Case of Nepalese Manufacturing Firms." International Research Journal of Management Science 5, no. 1 (2021): 130–47. http://dx.doi.org/10.3126/irjms.v5i1.35869.
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The study deals with the relationship between firm characteristics of working capital management and firm profitability in Nepal. It examines if firm performance, return on assets is related to cash conversion cycle, days’ sales outstanding, days’ inventory outstanding and current ratio. The study is based on pooled cross-sectional data of 10 non-financial firms from 2071/72 to 2075/76 of listed firms in the Nepal Stock Exchange. The study employed descriptive and causal-comparative research design to attainthe purpose of this study. The result reveals that the current ratio has a positively significant relationship with profitability and days’ sale outstanding has negatively significant relationship with the financial performance of the firm.
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Eric, Tjandra. "Influence of Working Capital Management and Policy to Profitability of Retail Trading Sector in Indonesia." International Journal of Current Science Research and Review 04, no. 12 (2021): 1776–81. https://doi.org/10.47191/ijcsrr/V4-i12-22.
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Abstract : Working Capital (WC) is an important aspect of any firms because of its correlation to risk (liquidity) and return (profitability). This research examines the influence of WC Management and Policy (WCMP) to profitability of 21 listed retail trading sector firms in Indonesia from 2011-2020 using panel data regression. In this research, WC Management (WCM) is measured by Cash Conversion Cycle (CCC) and its components which are Days Sales Outstanding (DSO), Days Inventory Outstanding, and Days Payable Outstanding (DPO); WC Policy is measured current assets divided by total assets or referred to as WC Investment Policy (WCIP) and current liabilities divided by total assets or referred to as WC Financing Policy (WCFP); and profitability is measured by Earnings Before Interest, Tax, Depreciation, and Amortization Margin (EBITDAM). The results show that firms can increase EBITDAM by shortening CCC, primarily through shortening DIO and lengthening DPO. Further, firms may improve EBITDAM by adopting a conservative WC Policy instead of an aggressive one, which means having higher current assets and lower current liabilities with respect to total assets.
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Tran Khoi Nguyen, LE, NGUYEN Duc Anh, LE Nhat Hoang, TA Ngoc Khanh, and PHAM Phuong Thao. "THE IMPACT OF CASH CONVERSION CYCLE ON THE PROFITABILITY OF FOOD AND BEVERAGE COMPANIES IN VIETNAM: COMMENTARY FROM QUANTITATIVE ANALYSIS." Vinh University Journal of Science 53, no. 1B (2024): 5–18. http://dx.doi.org/10.56824/vujs.2023b124.
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This research paper focuses on examining the relationship between the cash conversion cycle (CCC) and the profitability of Food and Beverage (F&B) companies in Vietnam by utilizing quantitative models. Analyzing a sample of 23 companies in the period from 2015 to 2021, the study revealsthat a reduction in the CCC positively influences profitability, as measured by the return on assets (ROA) ratio. The study further dissects the impact of CCC’s components, including days payable outstanding (DPO), days inventory outstanding (DIO), and days sales outstanding (DSO), on profitability. Based on regression analysis results, the study recommends that companies under study endeavor to reduce the durations of DPO, DIO, DSO, and CCC to improve profitability. Implementing strategies to tighten credit policies and optimize capital utilization is suggested as a means to achieve this objective.
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Bil Huda, Muhammad Arsala, and Layyinaturrobaniyah Layyinaturrobaniyah. "The Role of Working Capital Management in Increasing Profitability (A Study of Fashion Retail Companies Listed on the Indonesia Stock Exchange During and Post Covid-19)." Dinasti International Journal of Economics, Finance & Accounting 6, no. 1 (2025): 376–94. https://doi.org/10.38035/dijefa.v6i1.4000.
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Working capital management is a financial management aspect aimed at optimizing current assets and liabilities to enhance profitability with minimal operational costs. This study aims to analyze the impact of working capital management on profitability in four fashion retail companies listed on the Indonesia Stock Exchange. The method used in this study is panel data regression. The results show that Days Sales Inventory (DSI) positively affects the Gross Profit Margin (GPM) but negatively affects the Operating Profit Margin (OPM). Days Sales Outstanding (DSO) has a negative impact on both GPM and OPM, while Days Payable Outstanding (DPO) positively affects OPM but has no significant effect on GPM. Meanwhile, the Cash Conversion Cycle (CCC) negatively impacts GPM and has no significant effect on OPM. These findings provide valuable insights into working capital management to enhance profitability in fashion retail companies.
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Sanjaya, Dedy. "Pengaruh Manajemen Modal Kerja dan Likuiditas Terhadap Profitabilitas Pada Perusahaan Perdagangan (Studi Kasus PT XYZ)." Syntax Literate ; Jurnal Ilmiah Indonesia 7, no. 9 (2023): 15573–92. http://dx.doi.org/10.36418/syntax-literate.v7i9.14621.
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Penelitian ini bertujuan untuk menginvestigasi dampak kesulitan dalam menerima pembayaran dari pelanggan dan kendala dalam membayar pemasok terhadap ketersediaan dana tunai perusahaan. Fokus penelitian ini juga melibatkan analisis tentang bagaimana komponen modal kerja dan tingkat likuiditas berpengaruh terhadap kinerja keuntungan suatu perusahaan dagang. Kasus yang dianalisis adalah PT XYY selama periode 2016 hingga 2021. Metode yang digunakan melibatkan analisis data time series setiap bulan dan penerapan model vector error correction model (VECM) untuk memahami hubungan antara variabel dalam jangka panjang. Variabel yang dianalisis meliputi elemen-elemen dalam modal kerja dan likuiditas perusahaan, days of sales in outstanding, days of sales in inventory (DSI), days of payable outstanding, cash conversion cycle (CCC). Likuiditas juga diukur dengan current ratio dan cash ratio. Tujuan utama adalah memahami bagaimana elemen-elemen ini mempengaruhi profitabilitas yang diukur dengan return on assets (ROA). Temuan menunjukkan bahwa DSI dan DPO memiliki dampak positif yang signifikan pada ROA, sementara DSO, cash ratio, dan CCC memiliki dampak negatif signifikan. Temuan ini menekankan pentingnya manajemen kewajiban kepada pemasok dalam menjaga profitabilitas. Implikasinya, perusahaan dapat menggunakan hasil ini untuk mengatur kebijakan operasional, terutama terkait pembayaran kepada pemasok dalam kontrak pembelian serta menjaga ketersediaan kas optimal dalam mengamankan likuiditas.
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Candeias, Teresa, and Diana Dias. "Wine Companies’ Profitability in the Old World: Working Capital’s Impact." Administrative Sciences 13, no. 8 (2023): 171. http://dx.doi.org/10.3390/admsci13080171.
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The purpose—The aim of this paper is to explain the relationship between working capital and profitability in the context of the wine industry. Design/methodology/approach—Artificial neural networks were used to analyze the relationship between working capital management and the profitability of Old World firms, based on a sample of 324 firms. Findings—The results suggest a positive relationship between the cash conversion cycle and the profitability of winery firms. Thus, an increase in the cash conversion cycle seems to increase wine companies’ profitability. Thus, managers can generate shareholder value by increasing the cash conversion cycle to a reasonable level. Regarding days of payable outstanding, there is a negative influence of the average payment term on the profitability of wine companies. This leads to the fact that the longer a company takes to pay its creditors, the less profitable it appears to be. In terms of days sales outstanding, the results suggest the existence of a negative impact of the average collection period on the profitability of winery firms. In other words, a reduction in the number of days a firm receives payment for sales positively affects the firm’s profitability. Finally, the results of the study show a positive relationship between days of outstanding inventory and the profitability of wineries, suggesting that wineries that maintain sufficiently high inventory levels have higher profitability. These results indicate that managers could create value for their shareholders if they managed their working capital more efficiently. Practical limitations/implications—The neural network can predict profits based on working capital management. However, the applied research methodology should be extended to other business typologies and wine firms of other countries to allow the generalization of results. Originality/value—This paper is the first study on the impact of working capital management on the financial performance of companies in the wine sector, particularly in the Old World. The results are an input to the wine business sector literature, one of the most representative of regional economies in the countries focused. The applied methodology can be adopted more broadly and underlies managerial implications. For future research, a similar analysis can be envisaged for the New World, and a comparison between the two blocks of countries, given the difference in characteristics and techniques of wine production, could be made.
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I, KARUNA. "A Study on Working Capital Management in Automotive chassis Manufacturing Pvt Ltd." INTERANTIONAL JOURNAL OF SCIENTIFIC RESEARCH IN ENGINEERING AND MANAGEMENT 08, no. 05 (2024): 1–5. http://dx.doi.org/10.55041/ijsrem34012.
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The effective management of working capital is crucial for all companies. Key elements of working capital management include days sales outstanding (DSO), days inventory outstanding (DIO), days payable outstanding (DPO), and cash conversion cycle (CCC). A study conducted on 332 Czech companies, 20 of which were certified by the EFQM (European Foundation for Quality Management) Model, investigated how these components of working capital management impact a company's profitability. Two regression models were utilized for testing - pooled regression and maximum likelihood estimation (MLE). The results indicated that all components of working capital management have a negative effect on profitability. Interestingly, the interaction between EFQM certified companies and working capital components had a positive impact on profitability, suggesting a beneficial relationship between these components and profitability for certified firms. However, it was found that receiving a quality certificate/award from the EFQM Excellence Model actually decreased a company's profitability. Keywords Working capital, Firm profitability CCC, EFQM, Czech firms
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Charitou, Melita Stephanou, Maria Elfani, and Petros Lois. "The Effect Of Working Capital Management On Firm’s Profitability: Empirical Evidence From An Emerging Market." Journal of Business & Economics Research (JBER) 14, no. 3 (2016): 111–17. http://dx.doi.org/10.19030/jber.v14i3.9750.
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In this study, we empirically investigate the effect of working capital management on firm’s financial performance in an emerging market. We hypothesize that working capital management leads to improved profitability. Our data set consists of firms listed in the Cyprus Stock Exchange for the period 1998-2007. Using multivariate regression analysis, our results support our hypothesis. Specifically, results indicate that the cash conversion cycle and all its major components; namely, days in inventory, days sales outstanding and creditors payment period - are associated with the firm’s profitability. The results of this study should be of great importance to managers and major stakeholders, such as investors, creditors, and financial analysts, especially after the recent global financial crisis and the latest collapses of giant organizations worldwide.
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Ginoga, Andina Nuraini, Nimmi Zulbainarni, and Trias Andati. "The Influence of Working Capital Management, Financial Charges, and Macroeconomics On Profitability in The Building Construction Sub-Sector." Jurnal Aplikasi Bisnis dan Manajemen 11, no. 2 (2025): 499. https://doi.org/10.17358/jabm.11.2.499.
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Background: Efficient working capital management is critical for building construction companies. Inadequate management can lead to operational inefficiencies, elevated financial charges, and reduced profitability. The stability of the national economy can also influence corporate performance. Purpose: This study aims to analyze the impact of working capital management, financial charges, and macroeconomic factors on the profitability of building construction sub-sectors. Design/methodology/approach: This study utilizes quarterly financial report data from ten construction companies listed on the Indonesia Stock Exchange (IDX) from 2015 to 2023. Macroeconomic data is obtained from the Badan Pusat Statistik and Bank Indonesia. The data is analyzed using descriptive statistics, comparative testing, and panel data regression. Findings/Results: Descriptive statistics indicate a fluctuating trend during the observation period, with days of sales outstanding dominating cash conversion cycle. Comparative tests reveal significant differences in working capital management, interest coverage ratio, and profitability before and during COVID-19. The panel data regression results indicate that days of inventory outstanding, days of payable outstanding, debt to equity ratio, working capital interest rates, construction GDP growth, and sales growth all have significant effects on profitability. Originality/value (State of the art): Thus, it can be concluded that the manager of building construction companies must give significant attention to the management of accounts payable and liabilities to enhance profitability. Keywords: building construction, financial charges, macroeconomics, profitability, working capital management
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Nhat, Quoc Nguyen. "Effect of Net Working Capital Management on the Profitability of Energy Business Companies Listed on the Stock Market of Vietnam." JOURNAL OF ECONOMICS, FINANCE AND MANAGEMENT STUDIES 06, no. 04 (2023): 1809–17. https://doi.org/10.5281/zenodo.7870763.
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The purpose of this study is to investigate the impact of net working capital management (NWCM) on profitability for 29 energy companies listed on the Ho Chi Minh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX), using panel data for six years from 2016 to 2021. The author conducts regression analysis with panel data; Feasible Generalized Least Squares (FGLS) method is subsequently undertaken to deal with the phenomena of heteroscedasticity and autocorrelation. Regression results from the FGLS method show that four components of working capital, including Days payable outstanding (DPO), Days sales outstanding (DSO), have statistically significant negative effects on profit figures (using ROS metric), Cash conversion cycle (CCC) has a statistically significant positive impact on profitable (ROS). But the research results show that there has no relationship between the number of days of inventory outstanding (DIO), Current Ratio (CR), the profitability (ROS). Based on the results, the author reconfirms the relationship between net working capital management and profitability, as well as provides energy trading companies in Vietnam with solutions to NWCM effectively in order to enhance firms’ value, especially in such an uncertain economic condition that is easily vulnerable to war or pandemic.
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Kouaib, Amel, and Mohammed Ibrahim Bu Haya. "Firm Performance of Saudi Manufacturers: Does the Management of Cash Conversion Cycle Components Matter?" Journal of Risk and Financial Management 17, no. 1 (2024): 16. http://dx.doi.org/10.3390/jrfm17010016.
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The purpose of this study is to examine the liquidity management of a corporation. It aims to examine how managing cash conversion cycle components affects corporate performance. A dataset of 88 firms listed on the Saudi Stock Exchange between 2018 and 2022 was analyzed using both pooled OLS and fixed effects regression models. A sample of 84 firms listed on the Saudi Stock Exchange for the period from 2018 to 2022 was used. Both the pooled OLS and the fixed effects regression models were used. This study’s key findings are: (1) there is a strong negative correlation between the time it takes to convert inventory into sales (inventory conversion period) and firm performance. If inventory does not sell quickly, profit tends to be lower. (2) Firm performance demonstrates a strong inverse relationship with the duration it takes for companies to collect cash from customers, commonly known as the accounts receivable collection period. A short accounts receivable collection period may become collectible and increase a business’s profitability and performance. (3) There is a highly significant negative link between the time taken to pay creditors (days payable outstanding) and firm performance. A short average payment period, indicated by a low payment period, suggests that the firm is promptly settling its bills and obligations without any delays.
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Maliha, Rabeta. "Working Capital Management and Firm Performance of Companies in Pharmaceuticals & Chemicals Industry of Bangladesh." International Journal of Science and Business 4, no. 8 (2020): 40–75. https://doi.org/10.5281/zenodo.3959157.
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This study has been initiated as an effort to understand working capital management practices of firms in the Pharmaceuticals and Chemicals Industry in Bangladesh. It has focused on relationship between the working capital variables and firm performance using panel data consisting of a sample of 31 firms from the Pharmaceuticals and Chemicals industry for a period of 19 years from 2000 to 2018. Various types of statistical tools such as mean, median, quartile analysis, graphs and charts and regression analysis have been used for the analyses. Fixed Effect model regression has been used based on the output of the Hausman Test. For testing the relationship between a firm’s profitability and its norms of working capital management, regression has been run considering Basic Earning Power as a dependent variable and current ratio, the cash conversion cycle, quick ratio, inventory conversion period, payable deferral period, days sales outstanding as explanatory variables. The cash cycle has a negative impact on the basic earning power which signifies that, as the cycle grows bigger the core profitability of the business reduces. The same applies for holding inventory for a longer period as it reduces core profitability. As the time to collect payment for sales increases, the core profitability of a business decreases. As companies age, they enjoy learning effects and become more efficient so positive relationship with core profitability exists. The major findings hence indicate that working capital is found to have significant impact on core profitability of firms in Pharmaceuticals and Chemicals industry.
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Bilal Chishty, Nayeem ul Hassan Ansari, Arsalan Hussain, and Shakira Fareed. "Working Capital Management and Corporate Internal Growth Performance: Evidence of Listed Non-Financial Companies in Pakistan." Reviews of Management Sciences 4, no. 1 (2022): 95–107. http://dx.doi.org/10.53909/rms.04.01.0119.
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Purpose: The main objective of this research is to determine the impact of working capital management (WCM) on the growth of manufacturing firms in Pakistan. Methodology: The dependent variable of Internal Growth Rate (IGR), is affected by independent variables of Days Sales Outstanding (DSO), Inventory Turnover (ITO), and Payables Deferral Period (PDP). Based on 5 years of (2016-2020) data of 174 non-financial listed companies taken from the Pakistan Stock Exchange (PSX), regression, descriptive and analytical analysis ascertained that the Working Capital Management (WCM) of a firm is comprehensively measured by the tool of Cash Conversion Cycle (CCC). Findings: The results showed that WCM played an important role in the value creation of the overall business as long as DSO and ITO have a negative impact on the IGR performance of the firm, and for the better performance of IGR, firms needed to keep DSO and ITO at a minimum level. Research limitations/implications: Due to the type of research that has been conducted, other sectors of the industry, such as service, finance, and food, have been left out, and focus has only been made on the manufacturing side. The findings of this study may not be completely applicable to all listed manufacturing firms due to the difference in size and environment that could also affect firms’ growth. Originality/value: This research provides a clear understanding and comprehension of the contribution of working capital management to profitability, and internal, and sustainable growth.
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Ruslan, Zuhri, and Anggoro Budi Nugroho. "Collectibility Improvement In PT. Kaltim Prima Coal Receivables Management: A Framework Roadmap Proposal." Jurnal Sosial Sains 2, no. 1 (2022): 149–58. http://dx.doi.org/10.36418/sosains.v2i1.320.
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Background : The Importance of efficient working capital management is indisputable given that a firm’s viability relies on the financial manager’s ability to effectively manage receivables, inventory, and payables. One of widely used measurement to calculate the effectiveness of working capital management is Cash Conversion Cycle. Purpose : Traditional Cash Conversion Cycle is calculated using items from Financial Statement. However, it is proofed to be overstated compare to the actual calculation. Based on a comparison with Cash Conversion Cycle of another company listed on Indonesian Stock Exchange, Cash Conversion Cycle of PT Kaltim Prima Coal seems to be superior with lower days it needs to convert inventory into cash and longer time to pay its payables. Method: This research uses a quantitative approach method. Results : The research found that based on the regression method, days of late payment and sales amounts of late payment have significant relationship with Profit. Days of late payment and sales amounts of late payment have significant relationship with ROA. And, Days of late payment and sales amounts of late payment also have significant relationship with NPM. Conclusion : Variables of tourist attraction and price simultaneously influence the decision to visit the Blue Kersik beach, Marangkayu.
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., Supriyadi. "Kinerja Supply Chain Management." STAR 11, no. 2 (2022): 44. http://dx.doi.org/10.55916/jsar.v11i2.54.
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Kebutuhan untuk mengukur kinerja manajemen rantai pasokan dengan ukuran yang lebih luas dan berdimensi jangka panjang senakin dirasakan urgen. Saat ini, ukuran kinerja manajemen rantai pasokan banyak dikaitkan dengan aspek teknikal saja. Akibatnya, pengukuran kinerja rantai pasokan bersifat jangka pendek dan hanya berguna untuk penilaian operasional perusahaan. Artikel ini mencoba untuk membedah ukuran-ukuran kinerja manajemen supply chain berdasarkan perspektif keuangan. Basis kinerja supply chain menurut perspektif keuangan adalah pada upaya peningkatan Cash to cash cycle. Untuk mendapatkan cash to cash cycle yang optimal, beberapa hal dapat dilakukan seperti menambah modal kerja, mengurangi days sales outstanding, mengurangi days of inventory, dan menambah days payables outstanding
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Ruslan, Zuhri, and Anggoro Budi Nugroho. "Collectibility Improvement In PT. Kaltim Prima Coal Receivables Management: A Framework Roadmap Proposal." Jurnal Sosial Sains 2, no. 1 (2022): 149–58. http://dx.doi.org/10.59188/jurnalsosains.v2i1.320.
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Background : The Importance of efficient working capital management is indisputable given that a firm’s viability relies on the financial manager’s ability to effectively manage receivables, inventory, and payables. One of widely used measurement to calculate the effectiveness of working capital management is Cash Conversion Cycle. Purpose : Traditional Cash Conversion Cycle is calculated using items from Financial Statement. However, it is proofed to be overstated compare to the actual calculation. Based on a comparison with Cash Conversion Cycle of another company listed on Indonesian Stock Exchange, Cash Conversion Cycle of PT Kaltim Prima Coal seems to be superior with lower days it needs to convert inventory into cash and longer time to pay its payables. Method: This research uses a quantitative approach method. Results : The research found that based on the regression method, days of late payment and sales amounts of late payment have significant relationship with Profit. Days of late payment and sales amounts of late payment have significant relationship with ROA. And, Days of late payment and sales amounts of late payment also have significant relationship with NPM. Conclusion : PT. Kaltim Prima Coal are recommended to implement analysis of Risk Quadrant on periodic basis, to arrange Letter of Credit training to adopt Company Bank’s point of view in reviewing the Letter of Credit, to implement Letter of Credit checklist to reduce discrepancy rate, to arrange objective review of examining the extra staff requirement, and to develop Credit Policy.
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Farhan Ullah, Farhan Ullah, and Dr. Mustafa afeef. "Firm Profitability And The Administration Of Working Capital: Delving Into A Case Of The Cement Sector Of Pakistan." Journal of Business & Tourism 5, no. 2 (2021): 59–64. http://dx.doi.org/10.34260/jbt.v5i2.138.
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This study endeavors to establish an association between the administration of working capital and firm returns in Pakistan’s cement sector. Ten companies listed in the cement industry of KSE 100 Index were taken from Pakistan Stock Exchange randomly. Financial data in secondary form was collected from the financial reports of cement firms of the country. The study employed return on assets as an explained variable and inventory turnover period in days, collection period in days, payment period, cash conversion cycle, sales in log, and liquidity ratios as explanatory variables while controlling for the influence offirm’s size and firm’s growth in terms of sales. It was found that the current ratio, log of sales, cash conversion cycle and inventory conversion period positively influenced the return of companies whereas size of the firm, collection period of receivables, payment period to creditors and the debt ratio of firms had a negative influence on it.
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Tobazaa, Stephen Gbambil, and John Gartchie Gatsi. "Cash Conversion Cycle and Profitability: Empirical Evidence from Ghana’s Energy Sector." European Journal of Accounting, Auditing and Finance Research 13, no. 4 (2025): 72–84. https://doi.org/10.37745/ejaafr.2013/vol13n47284.
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This study investigates the impact of the Cash Conversion Cycle (CCC) on the profitability of energy sector companies in Ghana. Using data from four (4) firms spanning 2014 to 2022, the study employed descriptive statistics, correlation analysis, and regression techniques to explore the relationship between CCC components – Days Receivable Outstanding (DRO), Days Inventory Outstanding (DIO), and Days Payable Outstanding (DPO) – and key profitability metrics including Return on Assets (ROA) and Return on Equity (ROE). The findings revealed that a longer CCC negatively correlates with profitability while DIO and DRO positively influenced ROA. Extended payment periods were found to detract from both ROA and ROE. These findings underline the importance of optimizing CCC to enhance financial performance in Ghana’s energy sector. This study contributes to the existing body of literature by providing empirical evidence on the financial performance of energy sector companies, particularly in the context of working capital management. It underscores the critical relationships between the Cash Conversion Cycle and profitability metrics such as ROA and ROE. Moreover, the findings offer actionable recommendations that can assist firms in enhancing their financial performance, thus bridging the gap between theory and practice in financial management within the energy sector.
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Hossain, Md Mahabbat, and Tahmina Rahman. "Dependency of Profitability on Cash Conversion Cycle of Listed Companies: The Case of Engineering and Textile Industries in Bangladesh." Asian Accounting and Auditing Advancement 5, no. 1 (2014): 41–53. http://dx.doi.org/10.18034/4ajournal.v5i1.30.
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For attaining better performance in manufacturing firms, working capital management plays a noteworthy role. The study analyzes the impact of the length of the cash conversion cycle on a firm’s profitability, as a performance measure. For this purpose, data of 31 manufacturing firms in the engineering and textile industries are considered which are listed on Dhaka Stock Exchanges. Relevant data have been collected from the audited financial statements published in the annual reports for the year 2011 of the concerned firms. It is suggested that the firms should try to shorten the length of the cash conversion cycle which will increase the profitability of the firms. Among three components of the cash conversion cycle, the account receivable collection period in days is more crucial for manufacturing firms. To increase sales firms should tradeoff between sales and associated risk before offering credit facilities to their customers. Analyses also reveal that listed engineering firms are more profitable than listed textile firms. The study also proves the positive association between the size of a firm and profitability.
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Ali, Shahid. "Working Capital Management and the Profitability of the Manufacturing Sector: A Case Study of Pakistan’s Textile Industry." LAHORE JOURNAL OF ECONOMICS 16, no. 2 (2011): 141–78. http://dx.doi.org/10.35536/lje.2011.v16.i2.a6.
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This study explores the association between working capital management and the profitability of textile firms in Pakistan. The efficiency of working capital management is reflected by three variables: cash conversion efficiency, days operating cycle, and days of working capital. We use return on assets, economic value added, return on equity, and profit margin on sales as proxies for profitability. A balanced panel dataset covering 160 textile firms for the period 2000–05 is analyzed and we estimate an ordinary least squares model and a fixed effect model. Return on assets is found to be significantly and negatively related to average days receivable, positively related to average days in inventory, and significantly and negatively related to average days payable. Also, return on assets has a significant positive correlation with the cash conversion cycle, which would suggest that a longer cash conversion cycle is more profitable in the textiles business. The findings of the regression analysis show that average days in inventory, average days receivable, and average days payable have a significant economic impact on return on assets. The findings of the fixed effect model reveal that average days in inventory and average days receivable both have a significant impact on return on assets.
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Yakubu, Ibrahim Nandom. "The Effect of Working Capital Management on Dividend Policy: An Empirical Analysis of Listed Firms in Ghana." International Journal of Industrial Management 9 (January 5, 2021): 25–31. http://dx.doi.org/10.15282/ijim.9.0.2021.5952.
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Relying on more recent data spanning 2007-2016, this paper investigates the impact of working capital management (WCM) on dividend policy of listed non-financial firms in Ghana. Specifically, the study assesses the effect of cash conversion cycle (CCC), days inventory outstanding (DIO), profitability, and firm growth on dividend policy. Employing the ordinary least squares (OLS) analytical technique, the findings reported that working capital management (in terms of cash conversion cycle and days inventory outstanding) and dividend policy are positively related, with DIO having a significant effect on dividend policy. The results also established a positive association between the control variables (profitability and firm growth) and dividend policy albeit insignificantly. Based on the findings, the study concludes that working capital management in terms of days inventory outstanding (DIO) is a critical factor influencing firms’ dividend policy decisions. The study extends the inconclusive empirical evidence on the determinants of dividend policy and fills the lacuna in existing literature by focusing on how working capital management practices influence dividend policy of firms in Ghana. The findings are also useful to the board of directors of non-financial firms in deciding an appropriate dividend policy, and to the shareholders in making investment decisions.
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Shin, Seungjae, and Jack E. Tucci. "Wal-Marts Dilemma In The 21st Century: Sales Growth Vs. Inventory Growth." Journal of Applied Business Research (JABR) 31, no. 1 (2014): 37. http://dx.doi.org/10.19030/jabr.v31i1.8988.
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Wal-Mart has been a leader in the retail industry since 1980s. In the 21st century, Wal-Marts RFID initiative is another innovation for Wal-Marts supply chain management. Wal-Marts recent business target in the 21Century is making a higher sales growth rate than inventory growth rate. Comparing with financial ratios of Wal-Marts competitors, Wal-Mart has significantly better ratios for days-in-inventory, inventory-sales-ratio, and cash-conversion-cycle. However, there is no significant evidence of better ratios for supply chain related profit ratio. Regression analysis reveals that while days-in-inventory has a similar effect on both sales growth rate and inventory growth rate, supply chain ratio has more effect on inventory growth rate than sales growth rate.
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Khan, Muhammad Mahmood Shah, Sana Mansoor, and Sheikh Khurram Abid. "Working Capital Management: Study of the Cement Industry of Pakistan." Global Economics Review VII, no. II (2022): 156–70. http://dx.doi.org/10.31703/ger.2022(vii-ii).14.
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This article investigates how working capital influences firm profitability. Pakistan's cement industry. Further, the research analyses the Average Collection Period, Average Payment Period, Inventory Turnover in Days, and Cash Conversion Cycle's impact on profitability.This analysis utilizes annual reports from PSE cement businesses (PSX).It included firm info. Quantitative research uses two approaches. Models first. Pearson correlates variables. Second, regression analysis is to determine profitability, liquidity, and other variables' causes. Working capital management (WCM) increases profitability by positively affecting the cash conversion cycle, inventory turnover, and sales. Managers are asked to give WCM more thought. Management must know how much money to use for fixed assets and working capital. Poor working capital management results.
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Jehoiarib Umoren, Tobias Kwame Adukpo, and Nicholas Mensah. "Exploring factors, outcomes, and benefits in supply chain finance: Insights and future directions for the U.S. healthcare system." World Journal of Advanced Research and Reviews 25, no. 2 (2025): 060–71. https://doi.org/10.30574/wjarr.2025.25.2.0345.
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This article examines the factors, benefits, and outcomes of Supply Chain Finance (SCF) within the U.S. healthcare system, focusing on optimizing cash flow, reducing financing costs, and enhancing supply chain efficiency. The paper used a structured literature review. 25 research publications from the Scopus and Web of Science databases were selected and examined, with the most prevalent approaches being analytical, case-based, and simulation. Key findings showed that SCF provides significant financial and operational benefits, such as lower financing costs, increased access to capital, and improved profitability and financial performance. The Cash-to-Cash (C2C) cycle, which includes measures such as Days Sales Outstanding (DSO), Days Inventory Outstanding (DIO), and Days Payable Outstanding (DPO), is highlighted as a significant measure for demonstrating the financial value that SCF brings to supply chains. The study also emphasizes SCF's potential to create a "triple win" scenario for healthcare supply chain partners and financial service providers by facilitating efficient financing and lowering capital costs, particularly by leveraging partners with lower weighted average costs of capital (WACC). Technological integration, particularly with Fintech, has the potential to further streamline SCF procedures, improve transparency, and reduce decision-making costs, but regulatory complications continue to be a barrier. The study indicates that SCF can alter healthcare supply chains by enhancing liquidity and operational efficiency. The study concludes that SCF can considerably improve healthcare supply chains' liquidity and operational efficiency.
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Nguyen, Huy-Cuong, Manh-Dung Tran, and Duc-Trung Nguyen. "Working Capital Management and Firms’ Profitability: Evidence from Vietnam’s Stock Exchange." International Journal of Economics and Finance 8, no. 5 (2016): 55. http://dx.doi.org/10.5539/ijef.v8n5p55.
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<p>The paper investigates what effect Working Capital Management has on firms’ profitability by using the data from listed companies on Vietnamese Stock Exchange. The sample is collected from 127 public companies for the period of 9 years from 2006 to 2014. The research uses four variables to represent Working Capital Management, which are Day of Sales Outstanding (DSO), Day Sales of Inventories (DSI), Day of Payables Outstanding (DPO), and Cash Conversion Cycle (CCC). Moreover, in order to robust the result, the study also takes into the account the following variables: “Leverage, Growth, Tangibility, Size, Industrial Factors, and Macroeconomic Effects”, which were proven to have significant effects on firms’ profitability. The result implies that there is no correlation between Working Capital Management and firms’ profitability. Hence the conclusion is that Working Capital Management can help companies solve the short-term obligations and improve the efficiency by improving the supply chain and credit policies, however it has nothing to do with firms’ profitability of the companies in the sample.</p>
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Iqbal, Md Mazharul Islam. "Linking working capital efficiency to profit maximisation: A conceptual analysis." Economic Forum 15, no. 1 (2025): 93–102. https://doi.org/10.62763/ef/1.2025.93.
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The survival of a company is highly dependent on the management of its working capital. Effective working capital management can lead to greater profitability. Insufficient working capital or liquidity shortages can severely hinder profitability and operational sustainability. The primary objective of this research was to examine the relationship between efficient working capital management and profitability. To explore this connection, inventory, the cash conversion cycle, accounts receivable, and accounts payable were used as key indicators of working capital management. Profitability was evaluated using return on equity and return on assets, supported by a conceptual framework based on secondary data. The findings revealed a strong correlation between efficient working capital management and enhanced profitability. Effective management of cash inflows and outflows reduced financing costs and enhanced liquidity, leading to higher returns on equity and assets for companies with shorter cash conversion cycles. Companies with efficient accounts receivable processes significantly reduced their day’s sales outstanding, improving cash flow and operational flexibility. Maintaining optimal inventory levels enabled companies to increase turnover rates, improve profit margins, and lower inventory holding costs. Moreover, efficient accounts payable management, particularly through negotiated credit terms with suppliers, optimised payment schedules without damaging supplier relationships, further enhancing profitability. The results highlighted that businesses can achieve long-term profitability by aligning their working capital components with operational goals. Companies that actively manage their cash conversion cycle are better equipped to meet financial obligations without excessive debt, enabling them to invest in expansion opportunities. From a practical perspective, this study underscored the strategic importance of working capital management in driving profitability. Businesses can improve financial stability and strengthen their competitive position by adopting data-driven approaches to optimise cash flow, inventory, and credit management. These insights offer valuable guidance for managers aiming to enhance their company’s operational resilience and financial performance.
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Benardi, Beny, and Minarnita Verawati Bakara. "Mengukur Cash Conversion Cycle Perusahaan Terbuka Operator Telekomunikasi Seluler Di Indonesia Dalam Keterkaitannya Dengan Kinerja Pengelolaan Modal Kerja." Jurnal Telekomunikasi dan Komputer 3, no. 1 (2017): 27. http://dx.doi.org/10.22441/incomtech.v3i1.1112.
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Tingkat kinerja pengelolaan modal kerja perusahaan terbuka operatortelekomunikasi selular di Indonesia dipengaruhi oleh berbagai faktor-faktorkeuangan yang yang dapat diukur menggunakan rasio keuangan. Tujuandari penelitian ini adalah untuk mengukur kinerja perusahaan melaluiparameter Cash Conversion Cycle (CCC) Populasi dalam penelitian iniadalah seluruh perusahaan terbuka operator telekomunikasi selular yangterdaftar di Bursa Efek Indonesia pada tahun 2006-2010. Sampel terdiridari 5 perusahaan terbuka bidang telekomunikasi. Pengaruh variabel CCCterhadap ROA dan ROE diteliti menggunakan metode analisis korelasiPearson. Hasil penelitian menyajikan analisa parameter Days SalesOutstanding (DSO), Days Inventory Outstanding (DIO) dan Days PayableOutstanding (DPO) masing-masing operator telekomunikasi selulartersebut. Hasil penelitian menunjukan rata-rata nilai CCC perusahaanterbuka sebesar -68,96 hari.
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Malm, James, and Nilesh Sah. "Litigation risk and working capital." Managerial Finance 45, no. 1 (2019): 88–102. http://dx.doi.org/10.1108/mf-03-2018-0129.
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Purpose The purpose of this paper is to understand the association between litigation risk and working capital management. Design/methodology/approach The authors employ four different regression techniques (OLS regressions, regressions with industry and time controls, median regressions, and Fama Macbeth regressions) to study the relation between litigation risk (contemporaneous and lagged measures) and working capital management (cash conversion cycle (CCC) and its components). The authors also conduct numerous robustness tests. Findings The authors find that high-litigation risk firms tend to have longer CCC. Decomposing CCC into days receivable outstanding, days inventory outstanding and days payable outstanding, the authors find that high-litigation risk firms have longer receivable periods, take a longer time to convert inventory to cash and do not pay their suppliers promptly. These results are robust to a series of robustness tests including using an alternate measure of working capital and accounting for firm type (high-tech vs labor intensive). Originality/value This paper contributes in several ways to the litigation and corporate finance literature. The authors identify another determinant of working capital management and document another avenue whereby legal institutions affect short-term financial decision making. The link between litigation risk and working capital management is of interest to the business community, financial economists, management and the investing public.
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Nhat, Quoc Nguyen. "Impact of Net Working Capital Management on Profitability: Evidence from Vietnam Energy Sector." International Journal of Business Management and Technology 7, no. 3 (2023): 01–11. https://doi.org/10.5281/zenodo.7899920.
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This study examines the impact of net working capital (NWC) management on the profitability of 26 energy companies listed on the Vietnamese stock exchange for the period from 2012 to 2021. The author uses annual panel data, and the Feasible Generalized Least Squares (FGLS) method is subsequently conducted to deal with the phenomena of heteroscedasticity and autocorrelation. Regression results from the FGLS method show that Day sales outstanding (DSO), Day inventory outstanding (DIO), and the Cash convention cycle (CCC) have statistically significant negative impacts on profitability (ROE). The number of days payable outstanding (DPO) has a statistically significant positive impact on profitability (ROE). In contrast, the current ratio (CR) does not. According to the findings of this study, energy companies should apply an optimal and efficient method for managing the factors that negatively impact profits in net working capital management to generate high business profits.
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Achmady, Muzakir, Isni Andriana, and Kemas Muhammad Husni Thamrin. "The Analysis of Liquidity and Its Effect on Profitability, Sales and Working Capital Policy in Manufacturing Companies Listed on Indonesia Stock Exchange." JURNAL MANAJEMEN DAN BISNIS SRIWIJAYA 18, no. 4 (2021): 243–54. http://dx.doi.org/10.29259/jmbs.v18i4.12201.
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This study aims to analyze the liquidity through cash conversion cycle management and to examine the effect of liquidity on profitability, sales and working capital policy in manufacturing companies listed on Indonesia Stock Exchange in the period 2014-2018. Profitability is proxied by return on asset, sales (Total Sales) and working capital policy (Short-term debt to assets and current assets to total assets). The population of the study is manufacturing companies listed on Indonesia Stock Exchange. Purposive sampling method used as the sampling method. There are 21 manufacturing companies as the samples of the study. The type of data used in this study is quantitative and data sources of this study is secondary data. Descriptive statistic and simple linear regression analysis used as the research methodology. The result of descriptive analysis shows CCC benchmark of manufacturing companies is 95.0590 days with the highest value at 408.98 days and the lowest at -19.62 days. It is found that CCC has negative and significant effect on return on asset and total sales as well it has positive effect and significant on short-term debt to assets nevertheless CCC has positive but insignificant effect on current assets to total assets.
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Sany, Sany, Andrew Winata, and Teresa Veline Yasin. "Working Capital Management and Leverage to Profitability: Case of Manufacturing Firms in Indonesia." International Journal of Organizational Behavior and Policy 2, no. 1 (2023): 55–66. http://dx.doi.org/10.9744/ijobp.2.1.55-66.
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This study aims to investigate whether Working Capital Management (WCM) and leverage affect firm profitability. Data concern was gathered from Bloomberg database terminal. Sample is manufacturing companies listed in Indonesian Stock Exchange (IDX) over the period of 2014 – 2020, which already established for some time. WCM is measured by using Cash Conversion Cycle (CCC), profitability is proxied with ROA while leverage is proxied by Debt-to-Equity. We find that the length of CCC days does not affect profitability, while the higher proportion of debt to equity will reduce profitability, on the other hand, the higher sales growth will enhance better firms’ profitability performance. Our findings contribute to understanding of the relationship of CCC and leverage on profitability in emerging markets.
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Kademi, Ibrahim Shuayb, Norhayati Alias, Noor Hasniza Haron, and Raziah Bi Mohamed Sadique. "Working Capital Management and Financial Performance: Evidence from Nigeria’s Public Listed Manufacturing Companies." Accounting and Finance Research 13, no. 2 (2024): 142. http://dx.doi.org/10.5430/afr.v13n2p142.
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Working capital management is important in corporate finance and considerably impacts organizational profitability. The study investigates how working capital management impacts the performance (specifically in the context of financials) of publicly traded manufacturing companies listed on the Nigeria Stock Exchange (NSE). Data collected for this study was analyzed using Statistical Package for Social Sciences (SPSS) based on the sample of 18 manufacturing companies for five years from 2013 to 2017. Working capital management is important for all organizations as it can considerably impact profitability and financial performance. The linear regression study revealed a notable positive correlation between the Account Payable Period and profitability. An escalation in the duration of accounts payable is associated with increased profitability. The second regression model conclusion indicates that a reduction in the duration (days) to collect sales from consumers is linked to a reduction in the profit since accounts receivable are negatively and insignificantly correlated with profitability. The third discovery in this study revealed an insignificant adverse relationship between the conversion period for inventory and profitability. Manufacturing companies need to turn their inventory into sales to increase profits promptly. This analysis revealed an insignificant inverse correlation between the conversion cycle for cash and profitability.
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Essel, Ronald, and Joyce Brobbey. "The Impact of Working Capital Management on the performance of Listed Firms: Evidence of an Emerging Economy." International Journal of Industrial Management 12, no. 1 (2021): 389–407. http://dx.doi.org/10.15282/ijim.12.1.2021.6994.
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The aim/purpose of this scientific inquiry is to empirically examine the impact of working capital management (WCM) [cash conversion cycle (CCC), number of days inventory (INV), number of days account receivable (AR), number of days account payable (AP)] and control variables [sales growth (GROW), size (SIZE), leverage (LEV), current ratio (CR) fixed financial assets to total assets (FFA)] on firm performance (FP) [ROA, Tobin’s Q (TQ)] in the context of an emerging economy, Ghana. The research used a dynamic panel System of Generalized Method of Moment (GMM) to test the hypotheses. Utilizing financial data extracted from final accounts of 36 listed companies, spanning 2010-2019, the study examined WCM-performance-nexuses by following the methodologies of researchers/scholars in extant literature. Findings/Results indicates that, whilst INV, AR, LEV demonstrated negative/inverse/indirect associations with FP; AP, GROW, SIZE, CR, FFA depicted positive/direct associations with FP. CCC however, exhibited a quadratic concave relationship with ROA.
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Panigrahi, Shrikant Krupasindhu, Maryam Juma Al Farsi, Sumathi Kumaraswamy, Muhammad Waris Ali Khan, and Faisal Rana. "Working Capital Management and Shareholder’s Wealth Creation: Evidence from Manufacturing Companies Listed in Oman." International Journal of Financial Studies 10, no. 4 (2022): 89. http://dx.doi.org/10.3390/ijfs10040089.
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Working capital management (WCM) is a key factor in the success of manufacturing companies when credit is restricted, as is the case in the current climate caused by the COVID-19 crisis. The main purpose of this paper is to investigate the relationship between working capital management, earnings quality, sales growth, and shareholders’ wealth of listed manufacturing firms in Oman. The study used balanced panel data of 31 manufacturing firms listed on the Muscat Stock Exchange (MSE) from 2004 to 2019. The study reveals that days in working capital, cash conversion cycle, payable deferred period, sales growth, and earnings quality positively affects shareholder’s wealth proxied by the return on assets, whereas, days in working capital have a negative effect on return on assets. Similarly, working capital management was found to have no influence on the earnings per share (EPS). It was also documented that sales growth and earnings quality positively impacted EPS. The study concluded that improving sales growth and earnings quality would result in shareholders’ wealth creation. The results are helpful to manufacturing companies to improve their business performance and social welfare through a direct and indirect chain of raising investments, pay, and production scales. This study adds knowledge to the body of literature on working capital management, earnings quality, and sales growth in the areas of methodology, the impact of WCM components on manufacturing firms’ shareholder value, and socioeconomic evidence from Oman.
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Suleiman, Suleiman Umar, and Kamal Tasiu Abdullahi. "Effect of Ownership Structure and Performance of Listed Conglomerates Firms in Nigeria." Journal of Contemporary Research in Business, Economics and Finance 4, no. 3 (2022): 56–64. http://dx.doi.org/10.55214/jcrbef.v4i3.189.
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This study analyses the effect of ownership structure and performance of listed conglomerates on the Nigeria Stock Exchange. Over the years manufacturing firms in Nigeria had been faced with liquidity risk, risk of opportunity loss, overcapitalization, undercapitalization, and longer cash conversion cycle. The secondary data used is obtained from six selected manufacturing firms listed on the Nigeria stock exchange for the period of five years 2016-2020. The objective of the study is to analyze the effect of ownership structure and performance. Return on Assets is used as a measure of firm performance while the account receivable days, inventory days, account payables, and total sales are used as measures of ownership structure. The first and third hypothesis is tested using correlation and regression, and the second hypothesis is tested using Analysis of Variance (ANOVA). The study revealed that there is a positive significant relationship between total sales and return on assets and a negative significant relationship between account receivable days, inventory days, account payables, return on assets. This indicates that an increase in account receivable days, inventory days, and account payable will lead to a decrease in return on assets and vice versa. Therefore, to meet the firms' objectives, which are to increase profits and create better investor value, an adequate ownership structure should be maintained and each of its different components should be effectively and efficiently managed and controlled.
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Sembiring, Indriana. "PENGENDALIAN SETIAP REKENING TERHADAP EFEKTIVITAS ARUS KAS PT. ABC." Jurnal Organisasi dan Manajemen 14, no. 2 (2018): 161–70. http://dx.doi.org/10.33830/jom.v14i2.161.2018.
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This study research aims to analysis how the accounts receivable control to effectivity of cash flow PT. ABC. The analysis performed is: analyzing the management of receivables system in the control and manage of the accounts receivable of the company. Data obtained from the company in the Financial report data form of period July 2013-June 2014. The analysis in this study has used the descriptive analysis, trend analysis, cash conversion cycle analysis, and Financial ratio analysis. The results of this research study indicate that PT. ABC implements a management, processing to manage and control receivables system based on SOP (Standard Operating Procedures), but in the actual implementation there are having some things that are not in accordance with SOP. The factors involve the amount of receivables PT. ABC such as credit sales percentage, sales terms, customer type, and collection of the billing invoice. The account receivable takes more than 30 days (n>30), it means that the amount of receivables owned is not enough to be converted into cash, impact to pay account payables to suppliers. The credit policy would like to apply, expected to provide optimal benefits and able to accelerate the collectible receivables so that it can be converted into cash immediately, to be used as working capital and pay the account payables PT. ABC.
 Tujuan penelitian ini adalah menganalisis pengendalian piutang dagang terhadap efektifitas arus kas. Data diperoleh dari perusahaan berupa data laporan keuangan periode Juli 2013–Juni 2014. Analisis yang digunakan dalam penelitian ini adalah analisis deskriptif, trend, cash conversion cycle, dan analisis rasio keuangan. Hasil dari penelitian ini menunjukkan bahwa PT. ABC memberlakukan sistem proses manajemen pengelolaan dan pengendalian piutang berdasarkan POS (Prosedur Operasi Standar), namun dalam pelaksanaannya masih terdapat beberapa hal yang tidak sesuai dengan POS. Faktor-faktor yang mempengaruhi besarnya jumlah piutang PT. ABC yakni persentase penjualan kredit, ketentuan penjualan, tipe pelanggan, dan usaha penagihan. Piutang tertagih membutuhkan waktu lebih dari 30 hari artinya bahwa jumlah piutang yang dimiliki belum cukup untuk dikonversi menjadi kas, sehingga hal ini juga berdampak kepada pelunasan hutang-hutang PT. ABC kepada supplier. Kebijakan kredit yang diterapkan diharapkan mampu memberikan keuntungan yang optimal dan mampu mempercepat piutang tertagih sehingga bisa segera dikonversi menjadi kas untuk digunakan sebagai modal kerja dan membayar hutang dagang PT. ABC.
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Waqar-ul-Hassan, Zubair Mohsin, Hasnain Zeeshan, and Hussain Shahbaz. "WORKING CAPITAL MANAGEMENT AMONG LISTED COMPANIES OF PAKISTAN." International Journal of Research -GRANTHAALAYAH 5, no. 2 (2017): 80–91. https://doi.org/10.5281/zenodo.345448.
Full textAbstract:
Study aims to investigate the strength of working capital management for measuring financial performance of listed stocks. Study incorporates descriptive statistics, Pearson correlation and multiple regression models for interpretation and execution of data. Five years (2006-11) panel data of 125 listed companies of Pakistan stock exchange (PSX) is selected in accordance to sample selection criterion. Results of regression analysis supported inverse relationship between firm`s profitability and working capital management. Return on asset and Gross operation income are taken as indicators of profitability. Inventory turnover in days, Average age of A/R, Average payable period and Cash conversion cycle are considered as independent variables to measure firm’s profitability. Firm size, Sales growth and financial debt ratio are favoured as control variables. Overall Return on asset models indicated poor values of R-square`s and Gross operating income models showed robustness.
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Ul-Hassan, Waqar, Mohsin Zubair, Zeeshan Hasnain, and Shahbaz Hussain. "WORKING CAPITAL MANAGEMENT AMONG LISTED COMPANIES OF PAKISTAN." International Journal of Research -GRANTHAALAYAH 5, no. 2 (2017): 80–91. http://dx.doi.org/10.29121/granthaalayah.v5.i2.2017.1705.
Full textAbstract:
The study aims to investigate the strength of working capital management for measuring the financial performance of listed stocks. The study incorporates descriptive statistics, Pearson correlation, and multiple regression models for interpretation and execution of data. Five years (2006-11) panel data of 125 listed companies of Pakistan stock exchange (PSX) is selected in accordance to sample selection criterion. Results of regression analysis supported an inverse relationship between firm`s profitability and working capital management. Return on asset and Gross operation income are taken as indicators of profitability. Inventory turnover in days, Average age of A/R, Average payable period and Cash conversion cycle are considered as independent variables to measure firm’s profitability. Firm size, Sales growth, and financial debt ratio are favored as control variables. Overall Return on asset models indicated poor values of R-square`s and Gross operating income models showed robustness.