scholarly journals Practices and Stability of Working Capital Investment and Financing Policies: Evidence from Malaysia Public Listed Companies

2020 ◽  
Vol 17 (2) ◽  
pp. 311
Author(s):  
Mohamad Shahril Ishak ◽  
Noryati Ahmad ◽  
Fahmi Abdul Rahim
Keyword(s):  
Capital Investment ◽  
Management Practices ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Correlation Test ◽  
Financing Policies ◽  
Capital Financing ◽  
Investment And Financing ◽  
Industry Sectors

Working capital management is related to the operating activities of a company and therefore is one of the most significant decisions that managers need to make. Despite the important function of working capital management, this area has been very scantily researched. Aggressive or conservative working capital investment and financing policies imply the liquidity position of the company that could affect its operating profit. Not much is known about the working capital management practices among Malaysian companies. Hence, this study takes the task of investigating the trend and practices of working capital management policies of the Malaysian public listed in seven industry sectors. The industry sectors involved are industrial products, trading and services, consumer, properties, construction, plantation and technology. A total of 573 companies are involved in covering the period from 2001 until 2017. Using one-way ANOVA analysis, mean difference t-test and rank correlation test several findings were discovered. The practices of working capital investment policy (WCIP) for most industry sectors are consistently being applied throughout the study period instead of implementing the working capital financing policy (WCFP). Furthermore, the industry means ratio differences of WCIP and WCFP are statistically significant in most industry sectors studied even though the results of WCFP are mostly negative. This connotes a distinct difference in the asset management and financing policies between industry sectors. Lastly, the insignificant statistically negative results of the rank coefficient of correlation test provides inconclusive evidence if the conservative (aggressive) WCIP pursued is accompanied by the aggressive (conservative) WCFP.

scholarly journals Working Capital Management Policies and Returns of Listed Manufacturing Firms in Ghana

2017 ◽  
Vol 64 (2) ◽  
pp. 255-269 ◽  
Author(s):  
Anokye M. Adam ◽  
Edward Quansah ◽  
Seyram Kawor
Keyword(s):  
Stock Exchange ◽  
Manufacturing Firms ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Financing Policies ◽  
Current Asset ◽  
Investment And Financing ◽  
Management Policies ◽  
Ghana Stock Exchange

Abstract This study sought to determine the effects aggressive/conservative current asset investment and financing policies have on firms′ return for six manufacturing firms listed at Ghana Stock Exchange for a period of 2000-2013. Data were obtained from the annual reports of the firms and the Ghana Stock Exchange. The study adopted longitudinal explanatory non-experimental research design applied to dynamic panel ARDL framework in analyzing the data. The results revealed that the current asset investment and financing policies have highly significant positive effects on returns to equity holders in the long-run. The empirical evidence suggests that conservative current asset investment policies increase firms return while conservative financing policies yields negative returns. The study therefore would enable finance managers to be able to fashion out the appropriate working capital management policies. A firm pursuing conservative current asset investment policy should balance it with aggressive current asset financing policy in order to enhance profitability and create value for their investors.

Working capital management, board structure and Tobin's q ratio of Thai listed firms

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nongnit Chancharat ◽  
Chamaiporn Kumpamool
Keyword(s):  
Board Of Directors ◽  
Capital Investment ◽  
Generalized Method Of Moments ◽  
Board Structure ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Content Type ◽  
Listed Firms ◽  
Capital Financing

PurposeThis study investigates whether the integration between working capital management (WCM) and the structure of a firm's board of directors impacts its Tobin's q ratio. The sample set consists of 319 Thai listed firms with 3,190 firm-year observations from 2010 to 2019.Design/methodology/approachThe two-step generalized method of moments (two-step GMM) model is employed to address endogeneity.FindingsThe empirical results show that having both (1) a high level of net working capital holdings, a long period of net trade cycles or using an aggressive policy in working capital investment and (2) a more diverse board of directors decrease a firm's Tobin's q ratio. Conversely, when a firm's managers employ an aggressive policy for their working capital financing and the board structure of their firms is highly diverse, the firm's Tobin's q ratio increases. This indicates the appropriateness of some WCM policies is dependent on the characteristics of a firm's board of directors. Thus, the different integration between WCM and board structure may elicit dissimilar outcomes for a firm's Tobin's q ratio.Originality/valueTo their knowledge, the authors are the first to investigate the influence of the integration between WCM and board characteristics on Tobin's q ratio.

Working capital management performance of firms listed on Bursa Malaysia

2012 ◽  
Vol 9 (1) ◽  
pp. 73
Author(s):  
Abu Thahir Abdul Nasser ◽  
Omar Samat ◽  
Zin Ibrahim ◽  
Emelin Abdul Wahid ◽  
Ahmad Marzuki Amiruddin Othman
Keyword(s):  
Performance Indicator ◽  
Performance Measure ◽  
Capital Management ◽  
Working Capital ◽  
Financing Policy ◽  
Working Capital Management ◽  
Financing Policies ◽  
Capital Financing ◽  
Enhance Efficiency ◽  
Performance Ranking

This research paper investigated the working capital management (WCM) performance of 252 firms listed on Bursa Malaysia and identifed practices and policiesfor WCM to enhance efficiency in cash flow from operations. It also determined whether the size, profitability, inventory, and the current assets financing policy could enhance the WCM performance. The variables were 'Cash Conversion Efficiency' (CCE), afinancial performance measure, and 'Overall Working Capital Performance Ranking', a non-financial performance indicator. The findings revealed that the inventory, size, and profitability had significantly influenced the WCM performance. It was also identified that there was a mild positive relationship between the aggressive methodofworking capital financing and the CCE; and the ideal WCM practices and working capital (WC)financing policies to be adopted in firms to maximise the wealth ofthe shareholders.

scholarly journals Working capital management performance of firms listed on Bursa Malaysia

2010 ◽  
Vol 7 (1) ◽  
pp. 1
Author(s):  
Abu Thahir Abdul Nasser ◽  
Omar Samat ◽  
Zin Ibrahim ◽  
Emelin Abdul Wahid ◽  
Ahmad Marzuki Amiruddin Othman
Keyword(s):  
Performance Indicator ◽  
Performance Measure ◽  
Capital Management ◽  
Working Capital ◽  
Financing Policy ◽  
Working Capital Management ◽  
Financing Policies ◽  
Capital Financing ◽  
Enhance Efficiency ◽  
Performance Ranking

This research paper investigated the working capital management (WCM) performance of 252 firms listed on Bursa Malaysia and identifed practices and policiesfor WCM to enhance efficiency in cash flow from operations. It also determined whether the size, profitability, inventory, and the current assets financing policy could enhance the WCM performance. The variables were 'Cash Conversion Efficiency' (CCE), afinancial performance measure, and 'Overall Working Capital Performance Ranking', a non-financial performance indicator. The findings revealed that the inventory, size, and profitability had significantly influenced the WCM performance. It was also identified that there was a mild positive relationship between the aggressive methodofworking capital financing and the CCE; and the ideal WCM practices and working capital (WC)financing policies to be adopted in firms to maximise the wealth ofthe shareholders.

scholarly journals Working Capital Management Practices

2019 ◽  
Vol 8 (2S8) ◽  
pp. 156-161
Keyword(s):  
Management Practices ◽  
Secondary Data ◽  
Project Work ◽  
Capital Management ◽  
Working Capital ◽  
Short Term ◽  
Good Opportunity ◽  
Working Capital Management ◽  
Money Flow ◽  
The Relationship

VJ Engineers is one of the popular organizations in Chennai. Seeing the good opportunity to study financial systems and practices of VJ Engineers, it is relatively important to take up assignment on ‘WORKING CAPITAL MANAGEMENT IN VJ ENGINEERS’. During the project work, it is being analyzed the working capital position of this organization. [1],[ 3],[5] Decisions relating to working capital and short term financing are referred to as working capital management. These involve managing the relationship between a firm's short-term assets and its short-term liabilities. The goal of Working capital management is to ensure that the firm is able to continue its operations and that it has sufficient money flow to satisfy both maturing short-term debt and upcoming operational expenses.The study of working capital management is very helpful for the organisation to know its liquidity position. The study is relevant to the organization to know the day to day expenditure. This study is relevant to give an idea to utilise the current assets.This study is also relevant to the student as they can use it as a reference. This report will help in conducting further research. Other researcher can use this project as secondary data uncovering of PDA incorporation in effects on police reports.

scholarly journals Key factors in working capital management in the Brazilian market

2012 ◽  
Vol 52 (1) ◽  
pp. 55-69 ◽  
Author(s):  
Nathalie Vicente Nakamura Palombini ◽  
Wilson Toshiro Nakamura
Keyword(s):  
Balance Sheet ◽  
Internal Variables ◽  
Capital Management ◽  
Key Factors ◽  
Working Capital ◽  
Public Companies ◽  
Working Capital Management ◽  
Financing Decisions ◽  
Investment And Financing

Many studies have been conducted in corporate finance regarding long-term investment and financing decisions. However, short-term asset investments play a significant role in the balance sheet of companies. Moreover, financial managers dedicate significant amounts of time and effort to the subject of working capital management, balancing current assets and liabilities. This paper provides insights regarding the key factors of working capital management by exploring the internal variables of a number of companies. This study used data from 2,976 Brazilian public companies from 2001 to 2008, and found that debt level, size and growth rate can affect the working capital management of companies.

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.

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