Managing Economic Calculations of a Company

2015 ◽  
Vol 4 (4) ◽  
pp. 23-27
Author(s):  
Ровенский ◽  
Yu. Rovenskiy ◽  
Наточеева ◽  
N. Natocheeva ◽  
Белянчикова ◽  
...  
Keyword(s):  
Financial Performance ◽  
Debt Management ◽  
Working Capital ◽  
Credit Policy ◽  
Accounts Receivable ◽  
Accounts Payable ◽  
Enhance Efficiency ◽  
A Company ◽  
Financial Losses ◽  
Sources Of Capital

The paper considers the issues of how to manage the accounts receivable and accounts payable based on the findings of analysis of thereof. The authors propose to sort out definite stages in debt management and suggest ways to calculate the working capital amount to be allocated to accounts receivable; to assess the company financial performance, subject to the provision of onemonth and three-month discounts to debtors, and to evaluate the effect of the increase in accounts receivable in the upcoming period. All the above help to enhance efficiency of the company’s credit policy and of the accounts payables management and also allow to reduce financial losses related to attracting additional sources of capital.

Effect of Working Capital on Profitability of Selected Quoted Firms in Nigeria

2012 ◽  
Vol 13 (3) ◽  
pp. 367-381 ◽  
Author(s):  
Olayinka Olufisayo Akinlo
Keyword(s):  
Trade Credit ◽  
Capital Management ◽  
Working Capital ◽  
Credit Policy ◽  
Inventory Policy ◽  
Working Capital Management ◽  
Accounts Receivable ◽  
Financial Firms ◽  
Cash Conversion Cycle ◽  
Accounts Payable

The article examines the relation between working capital management and profitability for a sample of 66 Nigerian non-financial firms for the period 1997–2007. Trade credit policy and inventory policy are measured by number of days accounts receivable, accounts payable and inventories; and the cash conversion cycle (CCC) is used as a comprehensive measure of working capital management. The results suggest that firm’s profitability is reduced by lengthening the number of days accounts receivable, number of days of inventory and number of days accounts payable. The result shows that shortening the CCC improves the profitability of the firms.

Managing accounts receivable and accounts payable

2021 ◽  
pp. 7-13
Author(s):  
А.П. СОЛОВЬЕВА ◽  
А.В. СКРЯБИНА ◽  
Л.А. ЭВЕРСТОВА ◽  
Ф.Н. ПЕТРОВА
Keyword(s):  
Accounts Receivable ◽  
Accounts Payable ◽  
A Company

Предприятие обязано контролировать дебиторскую и кредиторскую задолженность, следить за сроками погашения, не позволять необоснованного роста суммы дебиторской задолженности, особое внимание уделять по истребованию просроченной задолженности, вести активную работу с контрагентами. Крайне внимательно относиться к расчетам с кредиторами, вовремя погашать им долги, в противном случае предприятие будут иметь штрафные санкции по расчетам с контрагентами – все это объясняет актуальность этой проблемы. Для повышения эффективности использования дебиторской и кредиторской задолженности нами разработаны мероприятия по управлению дебиторской задолженностью. A company must control accounts receivable and accounts payable, be sure to monitor repayment rates, not allow unreasonable growth of debtors and the amount of their debts, take timely measures to recover overdue debts, and actively work with debtors. It is also necessary to be extremely attentive to settlements with creditors, repay their debts on time, otherwise the company may lose the trust of its suppliers, banks and other creditors, will have penalties for settlements with counterparties – all this explains the relevance of this issue. To improve the efficiency of the use of accounts receivable and accounts receivable, we developed measures on managing accounts receivable.

Accounts Receivable: Payable Impact on Each Other with Special Reference to Financial Performance—A Study of Small Cap Companies

2020 ◽  
Vol 47 (4) ◽  
pp. 362-373
Author(s):  
Sangeeta Mittal ◽  
Monika
Keyword(s):  
Financial Performance ◽  
Trade Credit ◽  
Unit Root Test ◽  
Effective Management ◽  
Manufacturing Companies ◽  
Causality Test ◽  
Accounts Receivable ◽  
Accounts Payable ◽  
The Impact ◽  
Test Correlation

Trade credit is important as a funding source for companies having a liquidity shortage. Trade credit comprises of both accounts receivable and payable. The financial literature has discussed the impact of accounts receivable or payable on a company’s financial performance. However, there is a lack of studies on the effects of accounts receivable and payable on each other and further its effect on the financial performance of small-cap companies. Financial performance is determined using the profitability and value of the company. The researchers examined the financial performance implications of offering and receiving trade credit for a sample of 193 BSE small-cap manufacturing companies in India during the period 2011–2019. Granger causality test, Levin, Lin and Chu Unit root test, correlation and regression have been used for data analysis. The finding suggested that accounts receivable influenced the use of accounts payable. The aftermath of accounts payables is that it negatively and significantly affected the profitability and had an insignificant relationship with the value of the company. The result implies that effective management of accounts receivable can influence the application of accounts payable that improves a company’s profits and value. The current study is useful for SMEs’ managers in determining the financial performance and capital structure.

How does working capital management affect the profitability of Vietnamese small- and medium-sized enterprises?

2017 ◽  
Vol 24 (1) ◽  
pp. 2-11 ◽  
Author(s):  
Hien Tran ◽  
Malcolm Abbott ◽  
Chee Jin Yap
Keyword(s):  
Global Economy ◽  
Capital Investment ◽  
Raw Materials ◽  
Optimal Level ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Content Type ◽  
Accounts Receivable ◽  
Accounts Payable

Purpose Well-designed and implemented working capital management (WCM) will encourage positive returns for a business and establish the firm’s value, while ineffective management will undoubtedly lead to failure of the enterprise. The paper aims to discuss these issues. Design/methodology/approach In business, fixed capital and working capital are the two main forms of capital used. The current assets used in the business as working capital for day-to-day operations include raw materials, work in progress, finished goods, bills receivable, cash and bank balance. This paper analyses the relationship between WCM and profitability in Vietnamese small- and medium-sized enterprises (SMEs) after integration into the global economy. Findings The results suggest that SME owner-managers can increase their firm’s profitability by reducing the number of days of accounts receivable, accounts inventories and accounts payable to an optimal minimum. In addition, a robustness check of this study indicates that high profitability will be achieved, with an optimal level of working capital investment in accounts inventories, accounts receivable and accounts payable. Originality/value No work of this sort has been applied to Vietnamese circumstances. It is also rare in SE Asia more generally.

scholarly journals Working Capital Management dan Firm Profitability Perusahaan Sektor Manufaktur di Bursa Efek Indonesia dan Bursa Efek Filipina Periode 2014-2018

2020 ◽  
Vol 1 (1) ◽  
pp. 31-42
Author(s):  
Ricky Adiyanto ◽  
Werner Ria Murhadi ◽  
Liliana Inggrit Wijaya
Keyword(s):  
Stock Exchange ◽  
Linear Regression Method ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Accounts Receivable ◽  
Cash Conversion Cycle ◽  
Accounts Payable ◽  
Conversion Period ◽  
Firm Profitability

This study aims to analyze the effect of working capital management on the profitability of companies in Indonesia and Philippines. This study uses secondary data from companies listed in Indonesia Stock Exchange and Philippines Stock Exchange in the 2014-2018 period.  The sample used in this study includes manufacturing sector companies listed in Indonesia Stock Exchange and Philippines Stock Exchange in that period. This research uses multiple linear regression method. Working capital is measured using cash conversion cycle, accounts receivable conversion period, inventories conversion period, and accounts payable deferral period. The results of the Indonesian sample show that the cash conversion cycle and its components, namely the accounts receivable conversion period, the inventories conversion period, and the accounts payable deferral period have a significant positive effect on firm profitability. For the Philippine sample, the result of the study show that the cash conversion cycle and its components does not have a significant effect on firm profitability. Keywords: cash conversion cycle, accounts receivable conversion period, inventories conversion period, accounts payable deferral period

scholarly journals Ways to improve minimization of receivables and payments and management by them

2020 ◽  
pp. 26-29
Author(s):  
Olha BONDARENKO ◽  
Iryna MASIUK
Keyword(s):  
Financial Performance ◽  
Cash Flow ◽  
Current Account ◽  
Balance Sheet ◽  
Large Percentage ◽  
Economic Environment ◽  
Accounts Receivable ◽  
Optimal Ratio ◽  
Accounts Payable ◽  
Negative Effect

Introduction. To date, every entity has faced accounts receivable and payable. There are times when debt becomes overdue. An entity cannot repay its debt because debtors do not repay their debt. In fact, receivables and payables are closely linked, which in turn has a negative effect on the balance sheet and financial performance of any counterparty. This article discusses cases of arrears and ways of overcoming (reducing) accounts receivable and payables. The purpose of the paper is to study the factors that influence the increase in accounts receivable and payable within the internal and external activities of the enterprise. Results. In today's economic environment, a large number of Ukrainian enterprises went bankrupt and liquidated because they were unable to pay their debt to creditors. Also this situation arose due to a certain amount of cash, which was in circulation and in time did not enter the current account of the enterprise for payment of accounts payable. On the balance sheet receivables and payables account for a large percentage of both their and others' debt. We'll look at how and under what conditions debt can be reduced. Conclusion. It is advisable to balance receivables and payables in order to control the debt at the enterprise. The constant cash flow should not stop. The debt of the debtors goes to pay off the debt to the creditors. The optimal ratio is when the accounts payable exceeds accounts receivable by 10-20%.

scholarly journals The Effects Of The Great Recession On Corporate Working Capital Management Practices

2012 ◽  
Vol 11 (7) ◽  
pp. 753
Author(s):  
Rakesh Duggal ◽  
Michael C. Budden
Keyword(s):  
Management Practices ◽  
Negative Relationship ◽  
Shareholder Wealth ◽  
Working Capital ◽  
Capital Theory ◽  
Accounts Receivable ◽  
The Great Recession ◽  
Cash Conversion Cycle ◽  
Accounts Payable ◽  
Firm Profitability

Working capital theory prescribes using the optimal amount of net working capital to maximize shareholder wealth. Evidence from multiple countries indicates a negative relationship between the cash conversion cycle or net working capital and firm profitability. However, severe economic conditions may force firms to change their inventory, accounts receivable, and/or accounts payable policies, causing the firms to use more/less net working capital. Taking a sample of non-financial S&P 500 firms, many of which are multinationals, this study finds significant changes in the cash conversion cycle in 2010 for some industries. Also, it appears firms in general held more net working capital in order to face new economic challenges.

scholarly journals Application of ABC and XYZ-analysis to optimize receivables (on the example of "Komunpostach" LLC)

2020 ◽  
pp. 59-64
Author(s):  
Khrystyna Danylkiv ◽  
Khrystyna Gorbovа ◽  
Yurii Paida
Keyword(s):  
Debt Management ◽  
Managerial Decision ◽  
Macroeconomic Factors ◽  
Accounts Receivable ◽  
Accounts Payable ◽  
Methodical Approach ◽  
Abc Analysis ◽  
Effective Use ◽  
Market Relations ◽  
Relationship Of

Purpose. The aim of the article is to carry out a detailed analysis of the effect of receivables on the economic activity of the entities in terms of market relations and providing specific recommendations on their effective use and circulation in the activities of LLC "Komunpostach". Methodology of research. General and special methods of scientific knowledge are used in the course of the research, namely: critical analysis, scientific abstraction and generalization of scientific experience from modern theoretical researches (while studying theoretical principles and scientific approaches to the management of accounts receivable); statistical analysis (in generalization of trends, conditions and peculiarities of the formation of accounts receivable, management of accounts receivable of the enterprise of "Komunpostach" LLC); classification and analytical, abstract and logical (development of conceptual model of receivables management of the enterprise of “Komunpostach” LLC); optimization (when modelling the structure of accounts receivable of Komunpostach LLC); graphic (for visual and schematic reflection of theoretical and practical research results). Findings. The recommendations for improving the receivables management of "Komunpostach" LLC are given. In particular, it is grouped by the method of ABC analysis of corporate debtors. The method of transition to the combined policy of financing of current assets is offered, which will allow to optimize terms and amounts of accounts payable of "Komunpostach" LLC. Originality. Methodical approach to managerial decision making on optimization of accounts receivable for goods based on modelling of its structure by grouping counterparties by the criteria of timely debt repayment, in which, unlike the existing ones, both microeconomic and macroeconomic factors are taken into account receivables, which makes it possible to increase the degree of validity of decisions in the relationship of the company with the debtors. Practical value. The constant expansion of the credit market of Ukraine and the emergence of new forms of debt and credit relations in the practice of domestic enterprises, together with changes in the external environment and a complex system of legal acts, require the enterprises new methodological approaches to the management of accounts receivable. A scientifically sound debt management system can make a significant contribution to improving the efficiency of any business. Key words: Accounts Receivable; ABC and XYZ analysis; Matrix; Enterprise Resources; Liabilities and Debt Requirements; Accounts Receivable Management.

Measuring Cash‐to‐Cash Performance

2003 ◽  
Vol 14 (2) ◽  
pp. 83-92 ◽  
Author(s):  
M. Theodore Farris ◽  
Paul D. Hutchison
Keyword(s):  
Future Research ◽  
Accounts Receivable ◽  
Accounts Payable ◽  
Industry Performance ◽  
Managerial Implications ◽  
Key Drivers ◽  
Research Questions ◽  
A Company

The cash‐to‐cash (C2C) metric has evolved as one of the first measurements bridging across the firm. Therefore, it is important for managers to understand how the C2C metric is calculated, as well as how a company should compare in its C2C performance. In this paper, we define C2C and how to calculate it. Then, we provide an analysis and summary of C2C in 2001 for 5,884 companies using median performance by industry. A typology is introduced to classify industry performance using a 2 x 2 x 2 matrix based on the three variables of the C2C metric: accounts payable, inventory, and accounts receivable. We also consider how performance has changed since 1986, identify the key drivers to this change, and describe which industries have experienced the greatest change in C2C performance. Finally, managerial implications and future research questions are offered.

EVALUATION OF FACTORING IN THE COMPANY´S ACTIVITIES IN TRANSPORT SERVICE

2016 ◽  
Vol 10 (6) ◽  
pp. 50-62
Author(s):  
Татьяна Гараева ◽  
Tatyana Garaeva ◽  
Людмила Згонник ◽  
Lyudmila Zgonnik ◽  
Инесса Романовна Романова ◽  
...  
Keyword(s):  
Limited Liability ◽  
Financial Indicators ◽  
Transport Service ◽  
Working Capital ◽  
Tax Base ◽  
Accounts Receivable ◽  
Service Company ◽  
Company Limited ◽  
Accounts Payable ◽  
The Impact

The article presents an analysis of the factoring services market at the national and global levels, and identifies the main factoring market development trends. Based on the material of transport service company, limited liability company "Fairway", the authors substantiate the economic efficiency of factoring as a tool for replenishment of circulating assets of transport companies in the current economic conditions. Accumulation by factoring a number of functions is an important advantage over other forms of funding. This is especially important for small and medium-sized businesses in sphere of transport service that do not have sufficient volume of human and financial resources. Factoring allows to avoid a situation where the liability to tax on income appears before inflow of funds from the sale. Greater incentive for the factoring development for tax optimization is applying of a similar approach to the determination of the date of VAT payment. Funding within the factoring will allow Fairway to solve the problem of shortage of working capital without growth of accounts payable. Factoring has a positive effect on the financial indicators of an enterprise, such as liquidity and solvency. In general, the impact of factoring on the financial indicators of the transport service company "Fairway" is carried out by means of reduction of accounts receivable turnover period (shortening of the financial cycle), increasing the receivables turnover (number of turnovers), the reduction of the value of accounts receivable (release), more efficient use of working capital, increasing the coefficient of instant liquidity, reducing the tax base for income tax.

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