scholarly journals THE EFFECT OF WORKING CAPITAL MANAGEMENT ON FINANCIAL PERFORMANCE AND OPERATIONAL CASH FLOWS OF COMPANIES ACCEPTED IN TEHRAN SECURITIES EXCHANGE

2019 ◽  
Vol 7 (6) ◽  
pp. 625-632
Author(s):  
Ali Asghar Sameni ◽  
Razieh Fakour
Keyword(s):  
Financial Performance ◽  
Cash Flow ◽  
Cash Flows ◽  
Net Income ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Operating Profit ◽  
Operating Cash Flow ◽  
The Difference

Purposes: Working capital management can have a huge impact on financial performance and operational cash flows. In this research, the effect of working capital management components on financial performance and operating cash flows have been investigated. Methodology: The data used in this study are financial statements of companies listed in Tehran securities exchange for the period 2007 to 2011. Results: The difference between sales and operating profit as a benchmark for measuring performance and the difference between operating cash flow and operating profit as a measure of operating cash flow has been used. Regression results show that there is no meaningful relationship between the components of working capital management with financial performance and operating cash flow. Implications/Applications: Net income represents the change in a business's financial circumstances incurred through that business choosing to run its revenue-producing operations for one specific time period. Because the business cannot choose to run its revenue-producing operations without incurring expenses while doing so, net income is equal to revenues minus expenses. Expenses are often divided up into additional categories for ease of comprehension. Revenues minus cost of sales is equal to gross profit; gross profit minus operating expenses is equal to operating profit. Novelty/Originality: The novelty of this study is a balance between current assets and current liabilities, as well as maintaining a balance between profitability and liquidity which can serve a great purpose in the economy.

Horniman Horticulture

2017 ◽  
pp. 1-5
Author(s):  
Michael J. Schill
Keyword(s):  
Cash Flow ◽  
Business Owners ◽  
Free Cash Flow ◽  
Capital Management ◽  
Working Capital ◽  
Negative Effects ◽  
Working Capital Management ◽  
Financial Ratio ◽  
Financial Ratio Analysis ◽  
The Difference

This case captures the cash-flow and working-capital management problems typical of small, growing businesses. At the end of 2005, Bob and Maggie Brown have completed their third year of operating Horniman Horticulture, a $1-million-revenue woody-shrub grower in central Virginia. While experiencing booming demand and improving margins, the couple is puzzled by their plummeting cash balance. The case highlights the difference between cash flow and accounting profits, as well as the common negative effects of growth on cash flow. The case provides a forum for establishing appreciation for the relevance of free cash flow to business owners and managers, introducing financial ratio analysis, developing the concept of the cash cycle and working-capital management, and motivating the use of financial models.

scholarly journals ANALISIS LAPORAN ARUS KAS UNTUK MENILAI KINERJA KEUANGAN PERUSAHAAN MAKANAN DAN MINUMAN YANG TERDAFTAR DI BURSA EFEK INDONESIA

2018 ◽  
Vol 14 (1) ◽  
Author(s):  
Trisilia Kaloh ◽  
Ventje Ilat ◽  
Sonny Pangerapan
Keyword(s):  
Financial Performance ◽  
Cash Flow ◽  
Capital Expenditure ◽  
Cash Flows ◽  
Ratio Analysis ◽  
Net Income ◽  
Trading Company ◽  
Food And Beverage ◽  
Operating Cash Flow ◽  
Cash Flow Statement

 A necessity for companies to include cash flow statements in financial statements. One analysis of financial performance using the cash flow statement is the ratio of cash flow statements. The purpose of this study was to find out the financial performance of six food and beverage companies during 2014-2017. This study uses the ratio analysis method. The ratio used in this study is the ratio of operating cash flows, the ratio of operating cash flow to interest, the ratio of capital expenditure, the ratio of total debt, and the ratio of cash flows to net income. From the results of calculations using the ratio analysis of cash flow reports obtained that from the six food and beverage companies namely PT. Tiga Pilar Sejahtera Food Tbk, PT. Delta Djakarta Tbk, PT. Mayora Indah Tbk, PT. Nippon Indosari Corpindo Tbk, PT. UltraJaya Milk Industry & Trading Company Tbk, PT. Indofood Sukses Makmur Tbk has a very good improvement, although not too high.Keywords: Cash flow statement, Operating cash flow, Cash flow ratio, Financial performance, Bursa Efek Indonesia

scholarly journals Impact of working capital management on profitability: Evidence from Pakistan oil sector

2015 ◽  
Vol 1 (1) ◽  
pp. 286
Author(s):  
M.Yousaf Raza ◽  
Muhammad Bashir ◽  
Khalid Latif ◽  
Touqeer Sultan Shah ◽  
Mushtaq Ahmed
Keyword(s):  
Financial Management ◽  
Capital Budgeting ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Operating Profit ◽  
Work In Process ◽  
Fixed Assets ◽  
Oil Sector ◽  
The Impact

This study explores the impact of working capital management on the profitability of the firms in the oil sector of Pakistan. For the purpose of testing this relationship data from the annual reports of the sample companies is used from the period 2006 to 2010. Cash conversion cycles (CCC), average receivable, Average inventory, average payable, and current ratio are used as a measure of working capital management, while gross operating profit is used as a measure of profitability of the firm. There are three major issues in financial management that are capital budgeting, capital structure, and working capital management. So working capital management is one of the three major issues in financial management. A commercial firm consists of two types of assets, which are fixed assets and current assets. Current assets of a firm consist of cash, bank balance, account receivable, raw material, work in process, and finished goods. While fixed assets of the business require capital expenditure and these are used in increasing the production of the business, the Current assets are used in utilizing the fixed assets in day to day transactions.  Hence Current assets are regarded as lifeblood for any business firm, the play vital role in the daily operations of the business. Current assets and current liabilities regarded as are very important component of total assets and they need to be carefully managed for the long term success of the business. In this paper working capital management provide us profit by using average payable and gross operating profit but other variables in hypothesis shows negative relationships with each other.

scholarly journals The Influence of Future Cash Flow Predictions on Profits in Companies Listed on the Indonesia Stock Exchange

2021 ◽  
pp. 026-033
Author(s):  
Titik Purwanti
Keyword(s):  
Cash Flow ◽  
Stock Exchange ◽  
Cash Flows ◽  
Net Income ◽  
Purposive Sampling ◽  
Future Cash Flow ◽  
Operating Profit ◽  
Food And Beverage ◽  
Future Cash Flows

This research was conducted to determine the effect of future cash flow predictions on profits (gross profit, operating profit, and net income) in food and beverage companies listed on the Indonesia Stock Exchange. The method used in this research used purposive sampling with a population of food and beverage companies listed on the Indonesia Stock Exchange for the period 2016-2018. The samples in this research were 19 companies. The results obtained indicate that the operating profit variable has a partial effect on future cash flows, while the net income variable and the gross profit variable do not partially affect future cash flows. Simultaneously, gross profit, operating profit and net income have an effect on future cash flows.

The determinants of corporate cash holdings: evidence from Shariah-compliant and non-Shariah-compliant corporations

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Faisal Alnori ◽  
Abdullah Bugshan ◽  
Walid Bakry
Keyword(s):  
Cash Flow ◽  
Capital Expenditure ◽  
Cash Holdings ◽  
Order Theory ◽  
Working Capital ◽  
Pecking Order Theory ◽  
Content Type ◽  
Financial Firms ◽  
Operating Cash Flow ◽  
The Difference

PurposeThe purpose of this study is to investigate the difference between the determinants of cash holdings of Shariah-compliant and non-Shariah-compliant firms, for non-financial corporations in the Gulf Cooperation Council (GCC).Design/methodology/approachThe data include all non-financial firms listed in six GCC markets over a period 2005–2019. The IdealRatings database is used to identify Shariah-compliant firms in the GCC. To examine the determinants of cash holdings, a static model is used. To confirm the applicability of the method applied, the Breusch–Pagan Lagrange Multiplier (LM) and Hausman (1978) are used to choose the most efficient and consistent static panel regression.FindingsThe results show that, for Shariah-compliant firms, the relevant determinants of cash holdings are leverage, profitability, capital expenditure, net working capital and operating cash flow. For non-Shariah-compliant firms, the only relevant determinants of cash holdings are leverage, net working capital and operating cash flow. The findings suggest that the cash holding decisions of Shariah-compliant firms can be best explained using the pecking order theory. This reveals that Shariah-compliant firms use liquid assets as their first financing option, due to the Shariah regulations.Research limitations/implicationsFuture studies may investigate the optimal levels of cash holdings and compare the adjustment speeds toward target cash holdings of both the Shariah-compliant firms and their conventional counterparts.Originality/valueThis study is the first to investigate the difference between the determinants of cash holdings of Shariah-compliant and non-Shariah-compliant firms.

scholarly journals The Interplay between Working Capital Management and a Firm’s Financial Performance across the Corporate Life Cycle

2020 ◽  
Vol 12 (4) ◽  
pp. 1661 ◽  
Author(s):  
Zanxin Wang ◽  
Minhas Akbar ◽  
Ahsan Akbar
Keyword(s):  
Life Cycle ◽  
Firm Performance ◽  
Financial Performance ◽  
Life Cycle Stage ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Conservative Strategy ◽  
Corporate Life Cycle ◽  
The Impact

The purpose of this study is to examine the impact of working capital management (WCM) and working capital strategy (WCS) on firm’s financial performance across different stages of the corporate life cycle (CLC). We use Pakistani non-financial listed firms nested in 12 diverse industries over a period of 2005–2014 as the research sample and employ the hierarchical linear mixed (HLM) estimator, which can process multilevel data where observations are not completely independent. The empirical findings reveal that, overall, WCM is negatively associated with firm performance. However, this association is not static across different stages of a firm’s life cycle. For example, a negative association is more pronounced at the introduction stage followed by growth and decline stages, whereas WCM does not significantly impact the performance of mature firms. Likewise, WCS also causes varying effects on the financial performance across the CLC. A conservative strategy at the introduction, growth, and decline stages negatively affects firm performance, suggesting that these firms should adopt an aggressive strategy. Nevertheless, management of sample firms did not account for the respective life cycle stage while formulating a WCM strategy, which can seriously compromise their financial sustainability. These findings suggest that firms require customized WCM policies and WCS to attain sustainable financial performance at each stage of firm life cycle. Thus, managers should not overlook the significant role of CLC stages in their financial planning to ensure the sustainable functioning of the enterprise.

scholarly journals Working capital management and financial performance of UK listed firms: a contingency approach

2020 ◽  
Vol 11 (2) ◽  
pp. 173
Author(s):  
Ishmael Tingbani ◽  
Venancio Tauringana ◽  
Isaac Sakyi Damoah ◽  
Widin Bongasu Sha' ◽  
N.A. ven
Keyword(s):  
Financial Performance ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Listed Firms ◽  
Contingency Approach
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