scholarly journals Variable Reduction and Determinants of Working Capital Management on Profits for Ghanaian Banks

2016 ◽  
Vol 12 (7) ◽  
pp. 316
Author(s):  
Abeku Atta Asare-Kumi ◽  
Kwasi Adjepong Darkwah ◽  
Ezekiel N. N. Nortey ◽  
Charlotte Chapman-Wardy
Keyword(s):  
Risk Factors ◽  
Principal Component Analysis ◽  
Credit Risk ◽  
Stock Exchange ◽  
Principal Component ◽  
Component Analysis ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Several Variables

Today, several factors has contributed to the profitability of Banks. Data collected on these factors often has several variables. It is a non-trivial exercise to determine which of the factors that significantly influences the profits of Banks. This paper adopts the use of Principal Component Analysis (PCA) on the several variables expected to influence the working capital management on the profits of banks of the Ghana Stock Exchange (GSE). Fifteen of the several variables captured by the GSE which affect working capital management on profit were grouped into four factors using the principal component analysis. Results of the PCA identifies Convertibility factors, Risk Factor, Short term Liquidity, Operational factors, and Credit Risk factors to be the determinants of bank profits. Consequently, these factors are used to fit a linear regression model in identifying the most significant factors. Apart from credit risk factors, all the other factors were found to be significant predictors of the profit of Ghanaian banks. Investors, stakeholders, and managers of banks can use these factors to monitor and evaluate their working capital in generating profits.

scholarly journals Statistical and computational techniques for extraction of underlying systematic risk factors: a comparative study in the Mexican Stock Exchange

2021 ◽  
Vol 13 (2) ◽  
pp. 513-543
Author(s):  
Rogelio ◽  
Salvador Torra Porras ◽  
Enric Monte Moreno
Keyword(s):  
Risk Factors ◽  
Principal Component Analysis ◽  
Stock Exchange ◽  
Systematic Risk ◽  
Principal Component ◽  
Component Analysis ◽  
Computational Techniques ◽  
Arbitrage Pricing Theory ◽  
Pricing Theory ◽  
Systematic Risk Factors

This paper compares the dimension reduction or feature extraction techniques, e.g., Principal Component Analysis, Factor Analysis, Independent Component Analysis and Neural Networks Principal Component Analysis, which are used as techniques for extracting the underlying systematic risk factors driving the returns on equities of the Mexican Stock Exchange, under a statistical approach to the Arbitrage Pricing Theory. We carry out our research according to two different perspectives. First, we evaluate them from a theoretical and matrix scope, making a parallelism among their particular mixing and demixing processes, as well as the attributes of the factors extracted by each method. Secondly, we accomplish an empirical study in order to measure the level of accuracy in the reconstruction of the original variables.

scholarly journals Statistical and computational techniques for extraction of underlying systematic risk factors: a comparative in the Mexican stock exchange

2021 ◽  
Vol 13 (2) ◽  
pp. 237-268
Author(s):  
Rogelio ◽  
Salvador Torra Porras ◽  
Enric Monte Moreno
Keyword(s):  
Risk Factors ◽  
Principal Component Analysis ◽  
Stock Exchange ◽  
Systematic Risk ◽  
Principal Component ◽  
Component Analysis ◽  
Computational Techniques ◽  
Arbitrage Pricing Theory ◽  
Pricing Theory ◽  
Systematic Risk Factors

This paper compares the dimension reduction or feature extraction techniques, e.g., Principal Component Analysis, Factor Analysis, Independent Component Analysis and Neural Networks Principal Component Analysis, which are used as techniques for extracting the underlying systematic risk factors driving the returns on equities of the Mexican Stock Exchange, under a statistical approach to the Arbitrage Pricing Theory. We carry out our research according to two different perspectives. First, we evaluate them from a theoretical and matrix scope, making a parallelism among their particular mixing and demixing processes, as well as the attributes of the factors extracted by each method. Secondly, we accomplish an empirical study in order to measure the level of accuracy in the reconstruction of the original variables.

scholarly journals The impact of Working Capital Management on shareholders’ wealth and profitability: evidence from Colombo Stock Exchange

2018 ◽  
Vol 15 (2) ◽  
pp. 104-115
Author(s):  
Wasantha Perera ◽  
Pradeep Priyashantha
Keyword(s):  
Firm Size ◽  
Regression Models ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Least Square ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Holding Period ◽  
The Impact

The Working Capital Management (WCM) has an important role for the firm’s success or failure, because it directly affects the overall business health of the firm. This study examined the impact of WCM on profitability and shareholders’ wealth using 50 companies listed in different sectors on the Colombo Stock Exchange (CSE) for the period from 2010 to 2015. This sample represents 47% of the selected sectors of CSE. The profitability of the company is measured using gross operating profit (GOP) and shareholders wealth measured by Tobin’s Q (TQ) ratio. The WCM is measured using five independent variables namely stock holding period (SHP), debtors’ collection period (DCP), creditors’ settlement period (CSP), cash conversion circle (CCC) and current assets ratio (CAR). Further, three additional variables such as firm size (SIZE), leverage (LEV) and earning yield (EY) are employed as controlling variables to capture the impact of other performance of the companies.The data were analyzed using ordinary least square (OLS) and panel data regression models. These regression models reveal that there is a significant negative relationship between CCC and dependent variables (GOP & TQ). Further, this relationship has been confirmed by the major components of CCC such as SHP, DCP. Firm size also positively and significantly effects on the firm GOP while negatively effects on the TQ. Further, they revealed that there is a significant positive relationship between LEV and TQ. The study finds that the shareholders’ wealth and profitability can be increased through the efficiency of WCM.

scholarly journals Working Capital Management and Its Impact on Profitability in Tyre Industry: A Study of Selected Companies

2021 ◽  
Vol 2 (1) ◽  
pp. 40-46
Author(s):  
Tushar Rameshbhai Ajmera
Keyword(s):  
Regression Analysis ◽  
Financial Management ◽  
Stock Exchange ◽  
Practical Implication ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Turnover Ratio ◽  
The Impact ◽  
Tyre Industry

Purpose: The main aim of this article is to find out the working capital management and its impact on profitability in Tyre Industry of selected companies which are listed on stock exchange in India. Approach/ Methodology/ Design: For the study, a time span of 8 years from 2011-12 to 2018-19 is considered, and based on it, any relation of net profit margin ratio and working capital components like current ratio, quick ratio, inventory turnover ratio, working capital turnover ratio is considered. The sample is selected based on higher market capitalisation during the study period. Regression analysis is also employed to investigate the impact of WCM on corporate profitability. Findings: The major findings of this study indicate that the profitability of Balkrishana was good   compared to the other companies. The working capital of Ceat shows highly positive working capital management, whereas Apollo shows negative working capital management. These results were identified with the help of accounting tool as Ratio analysis and statistical tools as Regression analysis and ANOVA test for selected data. Practical Implication: The study examines the scenario of tyre industry with the help of working capital management in selected companies. The results of the study could be an indicator of the performance of the selected companies.   Originality/Value:  This paper provides some key insights to health and efficiency of the selected companies. The working capital ratios are indicative of good working capital management, leading to identifying issue in financial management and eventually improving the performance of the tyre industry.

scholarly journals Manajemen Modal Kerja Dan Dampaknya Terhadap Nilai Perusahaan Dengan Corporate Governance Sebagai Variabel Pemoderasi

2014 ◽  
Vol 6 (1) ◽  
pp. 68
Author(s):  
Adrianus Dhimas Setyanto ◽  
Ika Permatasari
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Stock Exchange ◽  
Capital Management ◽  
Working Capital ◽  
Corporate Values ◽  
Working Capital Management ◽  
Enterprise Value ◽  
Cash Conversion Cycle ◽  
The Relationship

AbstractThis study aims to determine the effect of working capital management on firm value. Corporate governance is used as a moderating variable in this study to explore the role of corporate governance in the relationship between working capital management with corporate values. Program participants of Corporate Governance Perception Index (CGPI) are used as a sample during the period from 2003 to 2011 and listed on the Indonesian Stock Exchange (IDX). We were using simple linear regression and the testing of moderating effects were calculated by Moderated Regression Analysis (MRA). The results showed that the working capital management has an influence on the value of the firm. However, corporate governance variables failed to moderate the relationship between working capital management and enterprise value. It shows that companies and investors in the market still lack concern for the program response and Corporate Governance Perception Index (CGPI) as an assessment of the application of the principles of corporate governance that has been done by the company .Keywords: Working Capital Management, Cash Conversion Cycle, Corporate Governance, Firm Values

scholarly journals Cash Conversion Cycle and Profitability, Evidence from Jordan

2019 ◽  
Vol 11 (2) ◽  
pp. 81
Author(s):  
Manar Moffadi Al-Mohareb
Keyword(s):  
Stock Exchange ◽  
Theoretical Aspect ◽  
Practical Aspect ◽  
Manufacturing Firms ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Amman Stock Exchange ◽  
The Impact

This study investigates the impact of working capital management and its components on profitability as a practical aspect, and how is compatible with the theoretical aspect. Besides, it examines other financial factors that may affect profitability by using a sample of Jordanian manufacturing firms listed in the Amman Stock Exchange for the period (2016-2018). Theoretically, manufacturing firms that have been studied have current assets over half of their total assets. Therefore, the working capital management role will be clearer on firm profitability.Practically, the results indicate that there is a significant relationship between the cash conversion cycle, which is considered as a proxy of working capital management, and profitability of the manufacturing firms. This provides an opportunity to create value for shareholders by decreasing receivable accounts and inventory, enhancing the profitability of the firms and reducing the collection period and by adopting effective credit policy.

WORKING CAPITAL MANAGEMENT IN TRANSPORT INDUSTRY COMPANIES LISTED ON WARSAW STOCK EXCHANGE

2017 ◽  
Vol 67 (0) ◽  
pp. 115-123
Author(s):  
Małgorzata Jarocka ◽  
Ewelina Mandera
Keyword(s):  
Comparative Analysis ◽  
Stock Exchange ◽  
Strong Tendency ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Purposive Sampling ◽  
Transport Industry ◽  
Warsaw Stock Exchange

Working capital management in transport companies stems from a variety of factors, the structure of assets being one which should be distinguished. In the transport companies listed on the Warsaw Stock Exchange there is a strong tendency to maintain positive working capital. The method of comparative analysis used in the article is based on purposive sampling cases. The aim of this article is to empirically verify the hypothesis that large transport companies listed on the Warsaw Stock Exchange maintain positive working capital.

scholarly journals Metabolic Syndrome Derived from Principal Component Analysis and Incident Cardiovascular Events: The Multi Ethnic Study of Atherosclerosis (MESA) and Health, Aging, and Body Composition (Health ABC)

2012 ◽  
Vol 2012 ◽  
pp. 1-9 ◽  
Author(s):  
Subhashish Agarwal ◽  
David R. Jacobs ◽  
Dhananjay Vaidya ◽  
Christopher T. Sibley ◽  
Neal W. Jorgensen ◽  
...  
Keyword(s):  
Risk Factors ◽  
Metabolic Syndrome ◽  
Principal Component Analysis ◽  
Body Composition ◽  
African Americans ◽  
Principal Component ◽  
Component Analysis ◽  
Continuous Measure ◽  
Cut Point ◽  
Health Aging

Background. The NCEP metabolic syndrome (MetS) is a combination of dichotomized interrelated risk factors from predominantly Caucasian populations. We propose a continuous MetS score based on principal component analysis (PCA) of the same risk factors in a multiethnic cohort and compare prediction of incident CVD events with NCEP MetS definition. Additionally, we replicated these analyses in the Health, Aging, and Body composition (Health ABC) study cohort.Methods and Results. We performed PCA of the MetS elements (waist circumference, HDL, TG, fasting blood glucose, SBP, and DBP) in 2610 Caucasian Americans, 801 Chinese Americans, 1875 African Americans, and 1494 Hispanic Americans in the multiethnic study of atherosclerosis (MESA) cohort. We selected the first principal component as a continuous MetS score (MetS-PC). Cox proportional hazards models were used to examine the association between MetS-PC and 5.5 years of CVD events (n=377) adjusting for age, gender, race, smoking and LDL-C, overall and by ethnicity. To facilitate comparison of MetS-PC with the binary NCEP definition, a MetS-PC cut point was chosen to yield the same 37% prevalence of MetS as the NCEP definition (37%) in the MESA cohort. Hazard ratio (HR) for CVD events were estimated using the NCEP and Mets-PC-derived binary definitions. In Cox proportional models, the HR (95% CI) for CVD events for 1-SD (standard deviation) of MetS-PC was 1.71 (1.54–1.90) (P<0.0001) overall after adjusting for potential confounders, and for each ethnicity, HRs were: Caucasian, 1.64 (1.39–1.94), Chinese, 1.39 (1.06–1.83), African, 1.67 (1.37–2.02), and Hispanic, 2.10 (1.66-2.65). Finally, when binary definitions were compared, HR for CVD events was 2.34 (1.91–2.87) for MetS-PC versus 1.79 (1.46–2.20) for NCEP MetS. In the Health ABC cohort, in a fully adjusted model, MetS-PC per 1-SD (Health ABC) remained associated with CVD events (HR=1.21, 95%CI 1.12–1.32) overall, and for each ethnicity, Caucasian (HR=1.24, 95%CI 1.12–1.39) and African Americans (HR=1.16, 95%CI 1.01–1.32). Finally, when using a binary definition of MetS-PC (cut point 0.505) designed to match the NCEP definition in terms of prevalence in the Health ABC cohort (35%), the fully adjusted HR for CVD events was 1.39, 95%CI 1.17–1.64 compared with 1.46, 95%CI 1.23–1.72 using the NCEP definition.Conclusion. MetS-PC is a continuous measure of metabolic syndrome and was a better predictor of CVD events overall and in individual ethnicities. Additionally, a binary MetS-PC definition was better than the NCEP MetS definition in predicting incident CVD events in the MESA cohort, but this superiority was not evident in the Health ABC cohort.

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