scholarly journals Importancia de la administración eficiente del capital de trabajo en las Pymes. // Importance of efficient management of working capital in SMEs.

Ciencia Unemi ◽  
2017 ◽  
Vol 10 (23) ◽  
pp. 30 ◽  
Author(s):  
Juanita García Aguilar ◽  
Sandra Galarza Torres ◽  
Aníbal Altamirano Salazar
Keyword(s):  
Latin American ◽  
Early Years ◽  
Working Capital ◽  
Short Term ◽  
Cash Conversion Cycle ◽  
Documentary Analysis ◽  
Efficient Management ◽  
Scientific Papers ◽  
A Company ◽  
Theoretical Foundations

En este trabajo se analiza la importancia de una eficiente administración del capital de trabajo, como estrategia para lograr la operatividad de las Pymes y su permanencia en el tiempo. El capital de trabajo es el efectivo mínimo que toda empresa necesita para ejecutar con normalidad sus actividades operativas. Una gestión adecuada del mismo, permite contar con liquidez necesaria para cubrir las obligaciones de corto plazo, como resultado de la eficiente aplicación del ciclo de conversión del efectivo. Para esto, se aplicó una metodología de análisis documental tomando como referencia fuentes secundarias de investigación, tales como libros y artículos científicos. A partir de lo anterior, se analizó los fundamentos teóricos del capital de trabajo, sus métodos de cálculo y una revisión de investigaciones sobre la administración del capital de trabajo en Pymes latinoamericanas. Como resultado se determinó que el capital de trabajo es una herramienta financiera a la que todo administrador debe prestarle atención y dedicarle tiempo, debido a que determina la supervivencia de una empresa durante los primeros años de su existencia. Por otro lado, existen algunos métodos de cálculo para estimar el capital de trabajo, cada uno tiene sus características esenciales y su aplicación, dependen de la actividad a la que se dedique la entidad. ABSTRACTThis paper aims to analyze the importance of an efficient administration of working capital, as a strategy to achieve the operation of SMEs and their permanence in time. Working capital is the minimum cash that every company needs to execute its operating activities normally. Proper management of the asset enables to have the necessary liquidity to cover short-term obligations, as a result of the efficient application of the cash conversion cycle. For this, a methodology of documentary analysis was applied taking as reference secondary research sources, such as books and scientific papers. Based on the above, the theoretical foundations of working capital, their methods of calculation and a review of research on the management of working capital in Latin American SMEs were analyzed. As a result, it was determined that working capital is a financial tool that every manager must pay attention and spend time, because it determines the survival of a company in the early years of its existence. On the other hand, there are some calculation methods to estimate working capital, each has its essential characteristics and its application depends on the activity to which the organization is committed.

scholarly journals Management of current assets in the context of increasing the Enterprise’s Profitability

2015 ◽  
Vol 2 ◽  
pp. 27
Author(s):  
Iluta Arbidane
Keyword(s):  
Optimum Level ◽  
Regression Equations ◽  
Capital Management ◽  
Working Capital ◽  
Short Term ◽  
Working Capital Management ◽  
Essential Condition ◽  
Efficient Management ◽  
A Company ◽  
Made In

<p class="R-AbstractKeywords">In order to ensure the financial sustainability of companies under current economic conditions successful management of current assets is crucial. In practice it is quite often observed that the decisions related to current assets management in Latvian companies are made in the short-term aspects without making analysis. Efficient management of working capital is an essential condition of rise in profitability of a company.  Potentialities of working capital management in the context of efficient running of business have not been studied in Latvia up until now. The main aim of this article is to examine the effect of working capital on profitability of Latvian companies. The results of the research that has been performed in relation to Latvian enterprises confirm the existence of a correlation between components of working capital and profitability. The developed regression equations meant for forecasting profitability of a company applying working capital management methods can be used by Latvian enterprises. It follows that managers of an enterprise can forecast indexes characterizing profit, managing components of working capital and maintaining it on the optimum level</p>

scholarly journals Determinants of Working Capital Management in Latin American Companies

Innovar ◽  
2014 ◽  
Vol 24 (51) ◽  
pp. 5-17 ◽  
Author(s):  
Samuel Mongrut ◽  
Darcy Fuenzalida O’Shee ◽  
Claudio Cubillas Zavaleta ◽  
Johan Cubillas Zavaleta
Keyword(s):  
Data Analysis ◽  
Latin American ◽  
Firm Value ◽  
Panel Data Analysis ◽  
Country Risk ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Unbalanced Panel Data

The aim of this study is to determine the factors that affect working capital management in Latin American companies. Using an unbalanced panel data analysis for companies quoted in five Latin American capital markets it is shown that companies in Argentina, Brazil, Chile and Mexico are holding cash excesses, which could destroy firm value. Results show that the industry cash conversion cycle, the company market power, its future sales and country risk have an influence on the way Latin American companies manage their working capital with significant differences among countries in the region.

Firm, industry and economic determinants of working capital at risk

2016 ◽  
Vol 03 (04) ◽  
pp. 1650031 ◽  
Author(s):  
Tarek Ibrahim Eldomiaty ◽  
Mohamed Hashem Rashwan ◽  
Mohamed Bahaa El Din ◽  
Waleed Tayel
Keyword(s):  
At Risk ◽  
Value At Risk ◽  
Stock Exchange ◽  
Statistical Tests ◽  
Working Capital ◽  
Short Term ◽  
Firm Level ◽  
Cash Conversion Cycle ◽  
Wide Range ◽  
Capital At Risk

Purpose: The objective of this study is to examine the relative contribution of firm-level, industry-level and country level variables to working capital at risk. Working capital at risk is treated as the value at risk for a portfolio of firm’s current assets. As far as short-term liquidity is concerned, working capital at risk, being the maximum amount that a firm may lose at a certain confidence interval, must be the most important part that a firm’s management must focus on. Design/methodology/approach: This study empirically examines the possible associations between wide range of variables and working capital at risk. The sample firms include 143 non-financial firms listed in Egypt stock exchange. The data cover the years 2000–2014. The statistical tests include the fixed and random effects, testing for linearity versus nonlinearity. The least squares dummy variables and discriminant analysis are utilized. The working capital at risk is classified into three levels: low, medium and high. Findings: The general findings of the study show that cash conversion cycle and the leverage are the most significant determinants of working capital at risk. Both determinants have significant influence on the level of volatility of working capital throughout the three categories of working capital at risk. Originality/value: This study offers a new approach that deals with working capital as a portfolio, rather than single ratios, that firm’s management must decrease its volatility (value at risk), therefore, short-term liquidity can be improved significantly. This approach can be considered a financial engineering in terms of monitoring and managing short-term liquidity exposure.

scholarly journals Measurement and efficient management of environmental performances

2021 ◽  
Vol 5 (1) ◽  
pp. 47-58
Author(s):  
Bojan Krstić ◽  
Jovana Milenović ◽  
Tamara Rađenović
Keyword(s):  
Working Environment ◽  
Environmental Aspect ◽  
Environmental Consequences ◽  
Efficient Management ◽  
Doing Business ◽  
Scientific Papers ◽  
The Subject ◽  
Stakeholder Pressures ◽  
A Company ◽  
Environmental Performance Indicators

Numerous environmental problems and stakeholder pressures have led companies to accept responsibility for the environmental consequences of doing business. Measuring the environmental performances of companies is gaining in importance and is becoming the subject of analysis in scientific papers and academic circles. Environmental performance indicators enable companies to systematically review and obtain information on the environmental aspect of a company business. If companies take care of the living and working environment, they can increase the motivation of employees and thus increase labor productivity. The aim of this paper is to point out the role and importance of environmental performances of companies, the way they are measured and managed.

scholarly journals AGGREGATE AND DISAGGREGATE MEASURES OF OPERATING AND NON-OPERATING WORKING CAPITAL INFLUENCE ON FIRM PERFORMANCE: EVIDENCE FROM MALAYSIA

2021 ◽  
Vol 17 (No.1) ◽  
pp. 1-26
Author(s):  
Rabia Bashir ◽  
Angappan Regupathi
Keyword(s):  
Firm Performance ◽  
Tobin’S Q ◽  
Working Capital ◽  
Short Term ◽  
Return On Assets ◽  
Tobin's Q ◽  
Cash Conversion Cycle ◽  
Long Term Performance ◽  
Term Performance

The study is aimed at investigating the following issues: firstly, whether the different types of working capital, namely operating and non-operating working capital influence the short-term (return on assets) and long-term (Tobin’s Q) firm performance differently, and secondly whether the different measures of operating working capital, namely disaggregated and aggregated (cash conversion cycle) operating working capital, influence the short-term (return on assets) and long-term (Tobin’s Q) firm performance differently. It uses the panel data of 208 listed non-financial firms in Malaysia covering the period from 2013 to 2017, and the data has been sourced from Datastream. It employs the panel corrected standard errors regression model. The study has found that quicker sale of inventory increased both the short-term and long-term performance of the firm. Likewise, faster collection of receivables increased the long-term, but not short- term, performance. However, prompter payment of payables increased both the short-term and long-term performance. The study has also found that the disaggregated working capital measures – inventory, receivables, and payables contributed to a more nuanced influence of working capital on performance, compared to the aggregated working capital. The study has provided novel evidence that– higher non- operating working capital increased firm performance.

Working capital management and managerial talent

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nacasius U. Ujah ◽  
Augustine Tarkom ◽  
Collins E. Okafor
Keyword(s):  
Social Capital ◽  
Financial Constraints ◽  
Capital Management ◽  
Working Capital ◽  
Short Term ◽  
Working Capital Management ◽  
Content Type ◽  
Cash Conversion Cycle ◽  
Managerial Talent

PurposeTalented managers arguably remain quintessential to firm value and performance. While the literature offers evidence for the long-term orientation of talented managers, there is a paucity of evidence on the short-term performance of managers. Here, we examine the relationship between managerial talent and working capital management (WCM).Design/methodology/approachThis study primarily employs a panel fixed-effect method controlling for firm-year and firm-industry for non-financial and non-utility firms for the years 1980 through 2016. Also, the authors control of potential bias that may impact the result. These controls include social capital, financial constraints and tests for endogeneity and spurious correlation.FindingsThe authors find the association between managerial talent and WCM to be positive and significant. The results indicate that talented managers have a higher cash conversion cycle. The empirical evidence still holds after controlling for social capital, religiosity and financial constraints. Also, the evidence still holds by employing an interaction term between Tobin's Q as a proxy for investment opportunities and talented managers.Practical implicationsThe finding may lend credence to executive contracts. Human nature, by default, is only vested on a net benefit for self-aggrandization. Self-aggrandization can be evident through structures in managerial contracts. These contracts usually tie consequences to long-term growths. If a benefit is offered based on short-term operational goals, talented managers may do more to the management of working capital.Originality/valueIn the managerial talent literature, talents reflect a holistic picture of one that can succeed in both the short-term and long-term goals of a company. Here, the authors show that talented managers are inefficient in meeting short-term goal – working capital management. Thus, the authors add to the research by providing evidence that talented managers are myopic.

scholarly journals Working Capital Management and Return on Assets of Manufacturing Industry of Peru

2020 ◽  
Vol 11 (2) ◽  
pp. 382
Author(s):  
Wagner Enoc Vicente-Ramos ◽  
Marianela Roxana Ames Porras ◽  
Roberson Meza Quispe ◽  
Miguel Angel Rojas Zacarias
Keyword(s):  
Inventory Management ◽  
Manufacturing Industry ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Industrial Sector ◽  
Working Capital ◽  
Short Term ◽  
Return On Assets ◽  
Collection Period ◽  
A Company

This article contributes to the increase in knowledge and existing theory about the administration of working capital and its relation to profitability. Using a sample of 23 companies listed on the Lima stock exchange during the period 2009-2018. There is a negative relationship between profitability (ROA) and the average inventory period (PPI), in the same way a negative relationship between profitability and the average collection period (PPC), finally a positive relationship between profitability and the period average payment (PPP). It is concluded that a company of the industrial sector in Peru, manages to be more efficient, effective and competitive insofar as it improves the management of working capital, which is achieved if it achieves effective management of financial resources, an equitable policy of Customer credit, proper inventory management and proper management of supplier leverage and short term.

scholarly journals Liquidity variations and variability cohesiveness with revenue and profitability: A case of Saudi energy sector companies

Accounting ◽  
2021 ◽  
pp. 763-770 ◽  
Author(s):  
Anis Ali
Keyword(s):  
Secondary Data ◽  
Energy Sector ◽  
Business Organization ◽  
Financial Health ◽  
Working Capital ◽  
Short Term ◽  
Earning Capacity ◽  
Efficient Management ◽  
Equity Ratio

Liquidity refers to the paying ability of the business organization while profitability assesses the profit earning capacity of the business organization. The liquidity of the business organization can be bifurcated into two based on time i.e., short-term and long-term liquidity. The short-term liquidity reveals the operational efficiency while long-term liquidity refers to the financial capability to repay the long-term debts of the business organization. The short-term paying ability is the management of the working capital or efficient management of the current assets and current liabilities. The current assets and current liabilities are directly related to the revenue of the business and further affected by the profitability, indirectly. The long-term paying ability or financial health of the business organization is reflected by the debts and equity ratio. The energy sector of Saudi Arabia is a prominent sector and contributes to the economy progressively. The study is based on secondary data and reveals the long-term and short-term liquidity variations and the cohesiveness of long-term and short-term liquidity with the revenue and profitability of energy sector companies. The study reveals the significant variations in the short-term and long-term liquidity and cohesiveness between the revenue, profitability, and short-term and long-term liquidity of the energy sector companies.

scholarly journals Working Capital Management and Firms’ Profitability: Evidence from Vietnam’s Stock Exchange

2016 ◽  
Vol 8 (5) ◽  
pp. 55 ◽  
Author(s):  
Huy-Cuong Nguyen ◽  
Manh-Dung Tran ◽  
Duc-Trung Nguyen
Keyword(s):  
Supply Chain ◽  
Stock Exchange ◽  
Listed Companies ◽  
Capital Management ◽  
Working Capital ◽  
Short Term ◽  
Public Companies ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Macroeconomic Effects

<p>The paper investigates what effect Working Capital Management has on firms’ profitability by using the data from listed companies on Vietnamese Stock Exchange. The sample is collected from 127 public companies for the period of 9 years from 2006 to 2014. The research uses four variables to represent Working Capital Management, which are Day of Sales Outstanding (DSO), Day Sales of Inventories (DSI), Day of Payables Outstanding (DPO), and Cash Conversion Cycle (CCC). Moreover, in order to robust the result, the study also takes into the account the following variables: “Leverage, Growth, Tangibility, Size, Industrial Factors, and Macroeconomic Effects”, which were proven to have significant effects on firms’ profitability. The result implies that there is no correlation between Working Capital Management and firms’ profitability. Hence the conclusion is that Working Capital Management can help companies solve the short-term obligations and improve the efficiency by improving the supply chain and credit policies, however it has nothing to do with firms’ profitability of the companies in the sample.</p>

scholarly journals Analysis of Working Capital Management in Automotive Industry Sector Listed in Indonesia Stock Exchange

2021 ◽  
Vol 5 (1) ◽  
pp. 67-78
Author(s):  
Satriya Candra Bondan Prabowo ◽  
Rini Safitri
Keyword(s):  
Automotive Industry ◽  
Raw Materials ◽  
Stock Exchange ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Industry Sector ◽  
Collection Period ◽  
A Company

This study aims to determine the analysis of working capital management in automotive industry sector listed on the Indonesia Stock Exchange. The object of the study consisted of 12 companies included in the automotive industry sector which were listed on the Indonesia Stock Exchange from 2014 to 2018. The results showed that the average collection period, inventory collection period, average payment period, and cash conversion cycle showed fluctuating results during the study period . The less time it takes for a company to collect receivables, the more liquid a company is. While the less time needed to convert raw materials into finished goods shows good results because the inventory will not be too long in the warehouse so that it will reduce costs. The average payment period is relative for each company. That's because every company has a debt agreement with a certain period. The less time needed by the company since the raw materials purchased are paid until the trade receivables from the sale are billed, the better for the company because the faster the time needed to turn money into goods and into cash back which will increase company profits.

Sign in / Sign up

Export Citation Format

Share Document