scholarly journals THE EFFECT OF PROFITABILITY AND RISK MANAGEMENT ON WORKING CAPITAL MANAGEMENT

2011 ◽  
Vol 10 (1) ◽  
Author(s):  
Mudji Utami
Keyword(s):  
Risk Management ◽  
Regression Analysis ◽  
Manufacturing Sector ◽  
Financial Statements ◽  
Business Risk ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Firm Profitability ◽  
The Impact

This study aims to examine the impact of working capital management on profitability and risks of business companies. Furthermore, this study also examines what are the differences of working capital management industries in the manufacturing sector. Some researchers proved that influence of working capital management on profitability (Rahemanand Nasr 2007; Marc Deloof, 2003 and Hadori, 2005). In addition, Gitman (2009) also states that working capital management has an impact on firm profitability and risk. Business risk of each industry is different, thus working capital management will differ among industries. This study used data from 2001 until 2007 at the manufacturing sector firms which have coherent of annually financial statements during the study period and have been audited. In order to test the hypothesis, this study used regression analysis and analysis of variance. The research proves that working capital management affects profitability and risk of firm manufacturing sector during the period 2001-2007. Moreover, it also proves that there is a difference among working capital management industries in the manufacturing sector.

scholarly journals The Impact of Working Capital Management on Firm Profitability: Empirical Evidence from the Polish Listed Firms

2020 ◽  
Vol 14 (1) ◽  
pp. 9
Author(s):  
Sorin Anton ◽  
Anca Afloarei Nucu
Keyword(s):  
Empirical Evidence ◽  
Ordinary Least Squares ◽  
Optimum Level ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Listed Firms ◽  
Firm Profitability ◽  
Break Even Point ◽  
The Impact

The purpose of this study is to investigate the relationship between working capital and firm profitability for a sample of 719 Polish listed firms over the period of 2007–2016. The scarcity of empirical evidence for emerging economies and the importance of working capital efficiency motivate the research on the working capital–financial performance relationship. The paper adopts a quantitative approach using different panel data techniques (ordinary least squares, fixed effects, and panel-corrected standard errors models). The empirical results report an inverted U-shape relationship between working capital level and firm profitability, meaning that working capital has a positive effect on the profitability of Polish firms to a break-even point (optimum level). After the break-even point, working capital starts to negatively affect firm profitability. The study brings theoretical and practical contributions. It extends and complements the literature on the field by highlighting new evidence on the non-linear interrelation between working capital management (WCM) and corporate performance in Poland. From the practitioners’ perspective, the results highlight the importance of WCM for firm profitability.

scholarly journals Impact of Working Capital Management on Corporate Profitability- Empirical Evidence from Pharmaceutical Industry of Bangladesh

2018 ◽  
Vol 10 (9) ◽  
pp. 136
Author(s):  
Rakibul Islam ◽  
Mohammad Emdad Hossain ◽  
Mohammad Nazmul Hoq ◽  
Md. Morshedul Alam
Keyword(s):  
Regression Analysis ◽  
Correlation Matrix ◽  
Negative Impact ◽  
Pearson Correlation ◽  
Capital Management ◽  
Working Capital ◽  
Data Set ◽  
Working Capital Management ◽  
Pharmaceutical Firms ◽  
The Impact

Working capital management plays centric role in enhancing operational efficiency and their ultimate profitability. Globally financial managers have been searching the proper way on how to utilize working capital components which prolong profitability. The purpose of this study is to assess the impact of working capital components on profitability indicators of selected pharmaceutical firms in Bangladesh. The paper used financial data of 9 pharmaceutical firms listed in Dhaka stock exchange (DSE) covered 2011-2015. Two methods were used in this study for analysis data set. Firstly, to measure the relationship between selected variables Pearson Correlation matrix was used. Secondly, multiple regression analysis was used to investigate the impact working capital components on profitability of selected pharmaceutical firms. The study also conducted Durbin Watson test to assess autocorrelation of selected variables. In this study the correlation matrix identified a negative correlation between working capital components and profitability, whereas regression analysis found number of days account receivable (AR) had significant positive and current ratio (CR) and debt ratio (DR) had appeared a significant negative impact on profitability.

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.

Working Capital Management, Macroeconomic Impacts, and Firm Profitability: Evidence from Indian SMEs

2020 ◽  
Vol 9 (1) ◽  
pp. 144-158
Author(s):  
Ajaya Kumar Panda ◽  
Swagatika Nanda ◽  
Pradiptarathi Panda
Keyword(s):  
Inventory Management ◽  
Negative Relationship ◽  
Least Square ◽  
Small Scale ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Firm Profitability ◽  
Relationship Of ◽  
The Impact

The present study investigates the relationship between working capital management and SME profitability. It also analyzes the impact of macroeconomic impulses on firm profitability through efficient management of working capital in the case of Indian small and medium scale enterprises over the time period spanning from 2010 to 2017 using Feasible Generalized Least Square (FGLS) regression models. The study concludes the negative relationship of account receivables together with a positive relationship of inventories and account payables with SME profitability. It implies the firm managers can maximize SME’s profitability by converting the credit sales to cash as early as possible, by increasing the days of accounts payable and following a conservative inventory management strategy. Changes in economic growth and commercial bank advances to small scale industries are the key macroeconomic determinants that are impacting SME profitability. The results from this paper may guide the firm managers to shape their working capital management strategies to maximize profitability. Policymakers may find the study interesting to identify the macroeconomic parameters that significantly influence Indian SMEs.

scholarly journals Impact of working capital management on financial performance of the firm

2018 ◽  
Vol 5 (4) ◽  
pp. 1-6
Author(s):  
Agha Ammad Nabi
Keyword(s):  
Financial Performance ◽  
Financial Statements ◽  
Research Data ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
The Impact ◽  
Over The Top

This study is based on the impact of working capital management on financial performance of the firm. For pursuing the research data has been collected through the financial statements of lucky cement and attock cement. In this study one hypothesis has established. .the outcomes demonstrates working capital had huge effect on company's money related execution ye, it’s  fluctuate from association to association comparably, in this examination we contrast fortunate concrete and attock bond and each different as the outcomes indicates fortunate bond is more stable and manage association than the attock concrete. An effective working capital administration, positioning and controlling of present resources and existing debts in a way that executes the danger of letdown to meet due here and now assurances from one perspective and keep away from over the top interest in these benefits then again. Many overviews have confirmed that chiefs spend remarkable time on everyday matters that include working capital selections. . Liquidity for the firm of going isn't dependent on the liquidation estimation of its advantages, but instead on the worming money streams created by those advantages.

Sign in / Sign up

Export Citation Format

Share Document