scholarly journals The Effect of Working Capital Management on Profitability of Saudi Food and Beverages Corporations: An applied study (2015- 2019): أثر إدارة رأس المال العامل على ربحية شركات صناعة الأغذية المساهمة السعودية: دراسة تطبيقية (2015- 2019)

2021 ◽  
Vol 5 (25) ◽  
pp. 69-49
Author(s):  
Manal Mohammed Hamoudah, Elaf Naser Algarni Manal Mohammed Hamoudah, Elaf Naser Algarni
Keyword(s):  
Stock Exchange ◽  
Study Data ◽  
Capital Management ◽  
Working Capital ◽  
Control Variables ◽  
Financial Reports ◽  
Working Capital Management ◽  
Return On Equity ◽  
Food And Beverages ◽  
Firm Profitability

The study examined the effect of working capital management (average inventory period, average collection period and average payment period), on the profitability of Saudi food and beverages corporations listed in Saudi exchange during five years from 2015 to 2019. In addition, company size, debt ratio and company age was used as control variables. The study used Return on Asset (ROA) and Return on Equity (ROE) as measures of firm profitability. To achieve the aim of the study, data were obtained from the annual financial reports published in the “Tadawul”, Saudia Arabia Stock Exchange, for a purposive sample of twelve (12) companies out of (203) Saudi corporations listed. Descriptive statistics and Multiple regression analysis were used to test the hypotheses of the study. The results indicated that ROA and ROE have been explained at 48%, and 55% respectively. Furthermore, the results found that there is statistically significant effect of average payment period on ROA. However, while the results found that there is statistically significant effect of all control variables on ROE, it did not find any significant effect of any the working capital management variables on ROE. Based on the results, we recommend that corporations need to pay attention to managing working capital in more efficient ways, especially through speed in collection and slow payment, which in turn lead to increased firm profitability.

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

Working Capital Management and Firm Performance: Evidence from Non-Financial Firms in Pakistan

2019 ◽  
Vol 9 (2) ◽  
pp. 27-37
Author(s):  
Mohsin Siraj ◽  
Muhammad Mubeen ◽  
Salman Sarwat
Keyword(s):  
Inventory Management ◽  
Stock Exchange ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Working Capital Management ◽  
Return On Equity ◽  
Financial Firms ◽  
Asset Growth ◽  
The Impact

This study analyzes the effects of Working Capital management i.e. inventory management, receivable management and payable management, on the performance of the non-financial firms in Pakistan. Panel data of 280 nonfinancial firms enlisted in Pakistan Stock Exchange have been analyzed from 2000 to 2016. Firms’ profitability were proximate with return on assets and return on equity; whereas for growth i.e. sales growth and asset growth were used. The impact of Working Capital management is captured through its constituent policies such as Inventory management, Receivable Management and Payable management. Firm size, liquidity and leverage are used as control variables. Results suggest that Working Capital management has a significant impact on firms’ financial performance in terms of profitability, as well as growth. As far as component wise results are concerned, inventory management does influence the firms’ growth and Payable management significantly, hence affecting the firms’ profitability. However, only receivable management influences both profitability and growth.

scholarly journals Working Capital Management and Corporate Performance: Evidence from Sri Lankan Listed Manufacturing Firms

2018 ◽  
Vol 7 (2) ◽  
pp. 577 ◽  
Author(s):  
Ratnam Vijayakumaran ◽  
Sunitha Vijayakumaran
Keyword(s):  
Stock Exchange ◽  
Optimal Level ◽  
Sri Lankan ◽  
Firm Characteristics ◽  
Manufacturing Companies ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Firm Profitability ◽  
Performance Effects

Working capital that represents a significant portion of a firm’s total assets affects its profitability and liquidity. This study examines the performance effects of working capital management using a panel of listed manufacturing companies on the Colombo Stock Exchange (CSE) over the period 2011 to 2016. Controlling for unobservable firm specific heterogeneity and a set of observable firm characteristics, we document that working capital is non-linearly (inverted U-shaped) related to firm profitability. This indicates the existence of an optimal level of working capital that balances the costs and benefits of maintaining working capital, and maximizes firm’s performance.

scholarly journals Working Capital Management Policy and The Financial Performance of Food and Beverages Companies in Nigeria

2018 ◽  
Vol 2 (2) ◽  
pp. 75
Author(s):  
Yahaya Yusuf ◽  
Mohammed Sani
Keyword(s):  
Raw Materials ◽  
Stock Exchange ◽  
Secondary Data ◽  
Management Policy ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Food And Beverages ◽  
Food And Beverage ◽  
The Relationship

This study is set to examine the relationship between working capital management policy and profitability of quoted food and beverages companies in Nigeria. The population comprises a sample of ten (10) food and beverage companies quoted on the Nigerian Stock Exchange. The study used secondary data for a period of ten (10) years (2005-2014) and was analyzed using descriptive and inferential statistics with the aid of Stata version 13. Two research hypotheses were formulated and tested. It was found that, there is no significant relationship between receivable collection period (RCP) policy and profitability of quoted food and beverage companies in Nigeria. However, it was recommended that the management should identify the level of inventory which allows for uninterrupted production but reduces the investment in raw materials and minimizes reordering cost and hence increases profitability. The management should reduce their RCP from 53 days on the average to at most 30 days by instituting adequate control and flexible credit policy.

scholarly journals WORKING CAPITAL MANAGEMENT EFFECT ON RETURN ON EQUITY- EVIDENCE FROM LISTED MANUFACTURING FIRMS ON GHANA STOCK EXCHANGE (GSE)

2020 ◽  
Vol 5 (1) ◽  
pp. 47
Author(s):  
Michael Amoh Asiedu ◽  
David Kwabla Adegbedzi ◽  
Richard Oduro ◽  
Sulemana Iddrisu
Keyword(s):  
Negative Correlation ◽  
Stock Exchange ◽  
Manufacturing Firms ◽  
Net Income ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Return On Equity ◽  
Ghana Stock Exchange ◽  
Management Effect

Purpose: This paper seeks to assess working capital management effect on Return on Equity (net income (EAITP)/Equity) of listed manufacturing firms on the Ghana Stock Exchange (GSE). Methodology: The research design employed was descriptive as well as referential analysis. A panel data of thirteen (13) listed manufacturing firms on the Ghana Stock Exchange (GSE) for periods 2010 to 2019 was used for the study. Data which were the audited annual financial reports were accessed from Ghana Stock Exchange Fact Book and the web portals of the firms. Statistical Package for Social Sciences (SPSS, version 20) and Microsoft Excel were used in data analyses and presentations. Descriptive statistics was used to summarize the data in terms of measures of central tendency (mean), measures of dispersion (standard deviation) as well as minimum and maximum values. Pearson’s Product-Moment Correlation and Ordinary Least Square (OLS) multiple regression techniques were employed to establish the relationship and effect of working capital management on Return on Equity respectively.    Findings: Results showed that INV has statistically significant and negative correlation with ROE(r= -0.287 and p<0.05) as AR and ROE have statistically significant and negative correlation(r= -0.287, p<0.05). AP also has statistically significant and negative association with ROE(r= -0.407, p<0.05). The regression analysis showed that INV has a negative (β = -.01) and significant (p<0.05) effect on ROE as AR also has a negative (β = -.002) and significant (p<0.05) effect on ROE. Again, AP has negative (β = -.002) but insignificant (p>0.05) effect on ROE as CCC has statistically significant (p<0.05> and negative (-0.021) effect on ROE. Also, R and R-Sq. showed 59.5 % and 35.4% respectively, implying that the model is fit for predicting the criterion variable at any given levels of the predictor variables. Contribution to theory, practice and Policy: This work adds to working capital management literature by adopting ROE (Net Income (EAITP)/Total Equity) that responds to call by CFI (2015), and therefore addresses the pitfalls in prior studies. It is therefore a sine qua non for management, policy makers and practitioners to fashion strategies to ensure that working capital is managed to the core by reducing number of days inventory, number of days accounts receivable, number of days accounts payables and cash conversion cycle in order to create wealth for shareholders as well as expand operation of the firms.

scholarly journals Working capital management and financial performance of non financial quoted companies in Nigeria

2021 ◽  
Vol 10 (3) ◽  
pp. 241-258
Author(s):  
Umar Abbas Ibrahim ◽  
Abdulqadir Isiaka
Keyword(s):  
Financial Performance ◽  
Capital Expenditure ◽  
Stock Exchange ◽  
Random Effect ◽  
Ordinary Least Squares ◽  
Capital Management ◽  
Working Capital ◽  
Control Variables ◽  
Working Capital Management ◽  
The Right

This study examines the effect of working capital management on the financial performance of Non-financial companies quoted on the Nigerian Stock Exchange over the period 2014 – 2018 while using a panel research design. This work is unique because it considers a sample of 71 companies drawn from all the 10 non-financial sectors of the NSE. Unlike most extant studies, financial performance was captured by earnings per share as a proxy, while the right-hand side variable being working capital management was denominated by Accounts receivable period, Inventory turnover period, and Accounts payable period. This study also considered the effect of some control variables namely annual capital expenditure, age of firm, GDP,  firm size, growth of the company, and firm leverage on EPS.  Data were retrieved from the Nigerian Stock Exchange 2019 Factbook. The model estimation technique adopted was the Pooled Ordinary Least Squares, fixed effect, and random-effect methods. Results from this study are consistent with the theoretical position that all aspects of working capital management have a significant effect on financial performance. While ITP and ACP were negatively related to EPS, APP was found to have a positive relationship with EPS. The research results also reveal that although all the control variables were found to be significant, only the age of the firm was deemed to be positively related to EPS. Based on the findings, the research recommends that firms should focus their managerial attention on lowering their ITP and ACP while increasing their APP, as results indicate that management of these elements of working capital can translate into liquidity and higher profitability.  

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 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 &amp;amp; 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.

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