Does Firms’ Working Capital Efficiency Matter in Dividend Payout: Empirical Evidence from India

2021 ◽  
pp. 097226292110635
Author(s):  
Prince Bhatia ◽  
Narayanasamy Sivasankaran ◽  
Aditya Banerjee ◽  
Subir Chattopadhyay
Keyword(s):  
Stock Exchange ◽  
Secondary Data ◽  
Tobit Regression ◽  
Working Capital ◽  
Dividend Payout ◽  
Beta Coefficient ◽  
Capital Efficiency ◽  
Research Gap ◽  
The Impact ◽  
Tobit Regression Model

The objective of this study is to assess the impact of working capital efficiency (WCE) (proxied by net trade cycle ( NTC)) on the dividend payout (proxied by dividend payout ratio ( DPR)) of the listed non-financial Indian firms. This study addresses the research gap in the literature about the influence of WCE on firms’ earnings distributed to equity shareholders as dividends in the Indian market. We have used secondary data of 150 firms that were listed on the Bombay Stock Exchange for the period 2012–2018 and analysed the data of the sample firms using the Tobit regression model. Our results indicate a negative and significant relationship between the NTC and the DPR of the sample firms. However, the beta coefficient of NTC was found to be very small, suggesting that the lower NTC may not inevitably generate a higher DPR of firms in the Indian context.

scholarly journals Working Capital Management (WCM) and Firm Performance in Emerging Markets: A Case of Bangladesh

2021 ◽  
Vol 10 (1) ◽  
pp. 36
Author(s):  
Rafiqul Bhuyan ◽  
Mohammad Sogir Hossain Khandoker ◽  
Noshin Tasneem ◽  
Mahjuja Taznin
Keyword(s):  
Stock Exchange ◽  
Secondary Data ◽  
Total Asset ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Current Asset ◽  
The Impact

We examine the impact of efficient working capital management on market value and profitability. Using secondary data on selected firms from Dhaka Stock Exchange we explore the effects of various working capital components (i.e. cash conversion cycle (CCC), current ratio (CR), current asset to total asset ratio (CATAR), current liabilities to total asset ratio (CLTAR), debt to asset ratio (DTAR), siz,e and growth) to the firm’s performance by looking firm’s value i.e. Tobin’s Q (TQ) and profitability i.e. return on asset (ROA) and return on invested capital (ROIC). Our results show that, for both food and overall manufacturing sectors, there is a significant association between working capital variables and firm’s value & return on assets, but an insignificant association with return on invested capital.

scholarly journals The Effect of Working Capital Management on Corporate Profitability: Evidence from Nigerian Food Product Firms

2015 ◽  
Vol 1 (2) ◽  
pp. 55 ◽  
Author(s):  
Sabo Muhammad ◽  
Rabi’U Saminu Jibril ◽  
Usman Sani K. Wambai ◽  
Fatima Bello Ibrahim ◽  
Tjjani Habibu Ahmad
Keyword(s):  
Stock Exchange ◽  
Negative Relationship ◽  
Secondary Data ◽  
Food Product ◽  
Annual Reports ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Short Term Investment ◽  
The Impact

The paper examines the impact of working capital management on corporate profitability through the periods of 2008 to 2012. The total of seven firms listed on the floor of the Nigerian Stock Exchange was studied, using secondary data generated from annual reports and accounts of the sampled companies and the Nigerian Stock Exchange Fact book. The data were analyzed by means of descriptive statistics and GLS regression analysis using STATA 11. The study finds a positive relationship among Average Collection Period (ACP), Current Ratio (CR) and the size of the firm (LOGSIZE) with Profitability and a negative relationship with Inventory Turnover Period (ITP), Average Payment Period (APP). The paper therefore recommends that cash collected should be re-invested into short-term investment to generate profits and fund left idle in the cash or excessive liquidity is costly and do not lead to profitability.

scholarly journals Determinants of Manufacturing Firms’ Financial Performance in Pakistan

2021 ◽  
Vol 3 (2) ◽  
pp. 1-10
Author(s):  
DR. SAID SHAH ◽  
S.M. AMIR SHAH
Keyword(s):  
Financial Performance ◽  
Stock Exchange ◽  
Secondary Data ◽  
Large Firms ◽  
Working Capital ◽  
Management Efficiency ◽  
Fixed Assets ◽  
Investment In Fixed Assets ◽  
The Impact ◽  
Medium Firms

Investment in working capital by and large shows better returns than investment in fixed assets. As such proper management of working capital rightfully attracts a lot of attention. The objective of this research is to examine the impact of size and working capital management efficiency on firms’ financial performance using 10 years (2004- 2013) secondary data of 153 firms listed on Pakistan Stock Exchange and employing regression and ratio analyses. Results show that performance-wise large firms are better whereas WCME-wise small and medium firms are better. These findings indicate that better performance of large firms is not because of efficient utilization of working capital - rather it may be due to some other factors and these firms can further improve their performance if working capital is managed more efficiently.

scholarly journals FAKTOR-FAKTOR YANG MEMPENGARUHI PROFITABILITAS PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA PERIODE 2014-2018

2021 ◽  
Vol 5 (1) ◽  
pp. 135-146
Author(s):  
Jen Erika Marintan Sianturi
Keyword(s):  
Stock Exchange ◽  
Manufacturing Sector ◽  
Secondary Data ◽  
Sampling Technique ◽  
Future Research ◽  
Company Size ◽  
Manufacturing Companies ◽  
Working Capital ◽  
Analysis Technique ◽  
Capital Efficiency

This study aims to determine the effect of company size, working capital, efficiency, liquidity and leverage on company profitability. The population in this study are manufacturing companies listed on the Indonesia Stock Exchange for the 2014-2018 period. The number of samples used was 104 companies using purposive sampling technique. This study uses secondary data with database collection techniques. The data analysis technique used panel data regression analysis. The results of the study found that company size, efficiency, liquidity and leverage have a positive and significant effect on company profitability, while working capital has a negative and insignificant effect on company profitability. Future research is expected to use samples other than the manufacturing sector and different measurements for the profitability variable in order to see the comparison of research results.

scholarly journals Analisis Profitabilitas Pada Perusahaan yang Tergabung dalam Indeks LQ45 di Bursa Efek Indonesia

2021 ◽  
Vol 11 (2) ◽  
pp. 130-145
Author(s):  
Feby Ayu Tri Ananda ◽  
Nurjanti Takarini
Keyword(s):  
Firm Size ◽  
Annual Report ◽  
Stock Exchange ◽  
Secondary Data ◽  
Stock Index ◽  
Sampling Techniques ◽  
Working Capital ◽  
Analysis Techniques ◽  
The Impact ◽  
A Company

Profitability is a measure by which a company assesses the success of a company's management. Having a good profitability level allows the company to continue its operations and increase its value. Understanding the impact of working capital, liquidity, and firm size is the purpose of thisXresearch. In addition, this research aims to know the differences in company’s financial performance from a previous reserach, wehether it still corresponded or had undergone changes. The object of this research is the manufacturingiicompany that makes up the LQ45 stock index in the Indonesian Stock Exchange. A total of 10 companies was taken to according to saturated sampling techniques, which is taking all the parts of the population as samples. The research data to be tested comes from secondary data according to the company’s annual report published periodically in BEI. Analysis techniques used in testing research hypotheses are multiple linier regressin. The results shows the regression analysis that (1) workingXcapital, liquidity, and firm size simultaneouslyiihave a significantiieffect on profitability. (2) working capital has a significantIeffect onIprofitability. (3) liquidity and firm size have no significant effect oniprofitability. Keywords : Profitability, Working Capital, Liquidity, Firm Size

scholarly journals The effect of working capital management, fixed financial asset ratio, financial debt ratio on profitability in Indonesian consumer goods sector

Accounting ◽  
2021 ◽  
pp. 661-666 ◽  
Author(s):  
Metya Kartikasary ◽  
Frihardina Marsintauli ◽  
Martogi Sitinjak ◽  
Sebastianus Laurens ◽  
Eka Novianti ◽  
...  
Keyword(s):  
Consumer Goods ◽  
Stock Exchange ◽  
Secondary Data ◽  
Total Sample ◽  
Financial Asset ◽  
Debt Ratio ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
The Impact

The purpose of this study is to analyze the impact of working capital management, fixed assets and debt ratio on company profitability. The study uses a sample of consumer goods sector companies listed on the Indonesia Stock Exchange from 2017 to 2019. The researchers use working capital management by the number of number of days account receivable (ARDays), the number of days Account Payable (APDays), the number of days inventory (INVDays), the Fixed Financial Asset Ratio (FA), and the Financial Debt Ratio (FD) with profitability by using gross profit (GP). Researchers used the secondary data obtained from the Indonesia Stock Exchange (IDX) on yearly basis and process the data statistics with multiple regression by SPSS 20. The population of this research includes 54 companies and the total sample covers 46 companies by passing the purposive sampling stage. The results of this study indicate that there was a significant relationship between working capital management, FA ratio and profitability while FD ratio had no effect on profitability.

scholarly journals Effects of Financial Determinants on Dividend Payout: Evidence from Nepalese Retail Banks

The Batuk ◽  
2021 ◽  
Vol 7 (1) ◽  
pp. 24-37
Author(s):  
Makshindra Thapa
Keyword(s):  
Stock Exchange ◽  
Secondary Data ◽  
Cash Flows ◽  
Dividend Payout ◽  
Book Value ◽  
Net Profit ◽  
Negative Effect ◽  
Retail Banks ◽  
The Impact ◽  
Positive Effect

This paper aims to examine the impact of five commonly used dividend determinants as; net profit, cash flow, size, market to book value, and slack on the dividend payout ratio of 19 Nepalese commercial banks. This study uses secondary data collected from annual financial statements of the banks listed on the Nepal Stock Exchange. A total of 95 observations of the variables five fiscal years are considered. The method used casual comparative research design and regression analysis is conducted. The results showed a positive and significant effect of two variables; market to book value and slack on dividend payout ratio. The result also showed the positive effect of size on the dividend payout ratio. However, the results indicated a negative effect of profitability and cash flows on the dividend payout ratio of the banks.

scholarly journals DETERMINASI EFISIENSI MODAL KERJA DAN LIKUIDITAS TERHADAP PROFITABILITAS PADA PERUSAHAAN SEKTOR FARMASI YANG TERDAFTAR DI BEI

2019 ◽  
Vol 12 (1) ◽  
Author(s):  
Rina Dameria Napitupulu
Keyword(s):  
Quantitative Research ◽  
Stock Exchange ◽  
Secondary Data ◽  
Research Approach ◽  
Working Capital ◽  
Return On Assets ◽  
Current Ratio ◽  
Inventory Turnover ◽  
Capital Efficiency

<p><strong>ABSTRACT:</strong> This research aims to analyze the determination of working capital efficiency and liquidity towards profitability in the pharmaceutical companies listed on the Indonesia stock exchange. Research using quantitative research approach with the method of korelasional regression. The data of the secondary data is taken from BEI. Results of the study showed: first working capital (working capital turnover) affect to profitability (return on assets), second receivable turnover affect to profitability (return on assets), third inventory turnover affect to profitability (return on assets), fourth liquidity (current ratio) do not affect positive toward profitability (return on assets). In addition the results of the analysis show the sub sectors of the pharmacy in the period 2013-2017 to have the development of profitability (return on assets) through determination of coefficients test 62.9% of known (working capital turnover, inventory turnover, receivable turnover, current ratio) while the rest of 37.1% is affected by other variables that are not included in the regression model. While partially (individual) only working capital turnover, receivable turnover Inventory turnover, the effect on profitability (return on assets). <br /> <br />Keyword : working capital, liquidity, profitability, pharmaceutical sector <br /> <br /> <br /><strong>ABSTRAK:</strong> Penelitian ini bertujuan untuk menganalisis determinasi dari efisiensi modal kerja dan likuiditas terhadap profitabilitas pada perusahaan farmasi yang terdaftar di Bursa Efek Indonesia. Pendekatan penelitian menggunakan penelitian kuantitatif dengan metode korelasional regresi. Data yang diambil merupakan data sekunder dari BEI. Hasil penelitian menunjukan: pertama modal kerja (working capital turnover) berpengaruh terhadap profitabilitas (return on assets), kedua piutang usaha (receivable turnover) berpengaruh terhadap profitabilitas (return on assets), ketiga persediaan (inventory turnover) berpengaruh terhadap profitabilitas (return on assets), keempat likuiditas (current ratio) tidak berpengaruh positif terhadap profitabilitas (return on assets). Selain itu hasil analisis menunjukan sub sektor farmasi pada periode 2013-2017 memiliki perkembangan profitabilitas (return on assets) melalui uji koefisien determinasi diketahui sebesar 62,9% (working capital turnover, receivable turnover, inventory turnover, current ratio) sedangkan sisanya sebesar 37,1% dipengaruhi oleh variabel lain yang tidak termasuk dalam model regresi. Sementara secara parsial (individu) hanya working capital turnover, receivable turnover, Inventory turnover yang berpengaruh terhadap profitabilitas (return on assets). <br /> <br />Kata kunci: modal kerja, likuiditas, profitabilitas, sektor farmasi</p>

scholarly journals Pengaruh Growth Opportunity, Net Working Capital, Cash Conversion Cycle Dan Dividend Payout Terhadap Cash Holding

2019 ◽  
Vol 1 (3) ◽  
pp. 1259-1274
Author(s):  
Endah Ayu Wulandari ◽  
Mia Angelina Setiawan
Keyword(s):  
Sampling Method ◽  
Stock Exchange ◽  
Secondary Data ◽  
Cash Holding ◽  
Working Capital ◽  
Dividend Payout ◽  
Cash Conversion Cycle ◽  
Analysis Technique ◽  
Growth Opportunity ◽  
Research Period

This study aims to determine the effect of Growth Opportunity, Net Working Capital, Cash Conversion Cycle and Dividend Payout on Cash Holding property and real estate companies listed on the Indonesia Stock Exchange. The research period used is the period 2014-2017. The design of this study is causal associative research. The sample in this study was obtained by purposive sampling method. Based on the existing criteria, 42 companies were included in the study sample. The data used is secondary data. The data analysis technique used is panel regression analysis. The results showed that Growth Opportunity and Dividend Payout had no significant effect on Cash Holding. Meanwhile, Net Working Capital and Cash Conversion Cycle have a significant effect on Cash Holding. The ability of independent variables to explain the dependent variable is 10.89% and 89.11% is explained by other variables outside of this study.

scholarly journals The Impact of Dividend Policy on Firm Performance under High or Low Leverage; Evidence from Pakistan

2015 ◽  
Vol 2 (4) ◽  
pp. 16-25 ◽  
Author(s):  
Adnan Ali ◽  
Farzand Ali Jan ◽  
Maryam Atta
Keyword(s):  
Firm Performance ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Control Variable ◽  
Balance Sheet ◽  
Secondary Data ◽  
Financial Sector ◽  
Lagrangian Multiplier ◽  
Dividend Payout ◽  
The Impact

This study aims to find out the impact of dividend policy on firm performance under high or low debt for all the non-financial sector companies listed on Karachi Stock Exchange. This study has utilized the secondary data published by State Bank of Pakistan in the shape of Balance Sheet Analysis of non-financial sector for the period of 2006 to 2001 with the sample size consisting of 122 companies. Panel data models have been applied to examine the impact of dividend policy on firm performance in the presence of high or low leverage. Mainly it has focused on using two performance measures i.e. Tobin’s Q and Return on Equity both as dependent variables while the control variable includes the firm size and growth with debt as the moderating variable. Breusch and Pagan Lagrangian multiplier test for random effects suggested that OLS is better than fixed effect. It is found that the dividend payout ratio has got significant positive relationship with Tobin’s Q and ROA when there is both less and high debt. In addition, there is no moderating effect of debt on the relationship between dividend payout ratio and firm performance of all the non-financial firms listed in KSE.

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