scholarly journals Working capital management and firm profitability: Evidence from SMEs in Malaysia

2020 ◽  
pp. 99-105
Author(s):  
Hoang Cong Huan, Duong Nguyen Minh Huy Hoang
Keyword(s):  
Capital Market ◽  
Trade Credit ◽  
Small And Medium Enterprises ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Accounts Receivable ◽  
Cash Conversion Cycle ◽  
Firm Profitability ◽  
Medium Enterprises

Efficient working capital management is particularly important for Small and Medium Enterprises (SMEs) in coping with greater difficulty in accessing capital market. In this research, we investigate the importance of working capital management to SMEs by analyzing the influence of working capital management and its components (inventory, accounts receivable and account payable) to profitability of SMEs. By using a sample of SMEs listed on the ACE market – an alternative, sponsor-driven equity market designed for Malaysian SMEs during the period from 2010 to 2016, our findings suggest that managers of Malaysian SMEs can enhance profitability by holding a large amount of inventory, offering more trade credit to customers, and lengthening the cash conversion cycle.

Effect of Working Capital on Profitability of Selected Quoted Firms in Nigeria

2012 ◽  
Vol 13 (3) ◽  
pp. 367-381 ◽  
Author(s):  
Olayinka Olufisayo Akinlo
Keyword(s):  
Trade Credit ◽  
Capital Management ◽  
Working Capital ◽  
Credit Policy ◽  
Inventory Policy ◽  
Working Capital Management ◽  
Accounts Receivable ◽  
Financial Firms ◽  
Cash Conversion Cycle ◽  
Accounts Payable

The article examines the relation between working capital management and profitability for a sample of 66 Nigerian non-financial firms for the period 1997–2007. Trade credit policy and inventory policy are measured by number of days accounts receivable, accounts payable and inventories; and the cash conversion cycle (CCC) is used as a comprehensive measure of working capital management. The results suggest that firm’s profitability is reduced by lengthening the number of days accounts receivable, number of days of inventory and number of days accounts payable. The result shows that shortening the CCC improves the profitability of the firms.

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

scholarly journals The Effect of Working Capital Management and External Capital on Going Concern for Indonesian Small and Medium Enterprises

2019 ◽  
Vol 11 (1) ◽  
pp. 21
Author(s):  
Widya Exsa Marita ◽  
Ika Permatasari
Keyword(s):  
Small And Medium Enterprises ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Going Concern ◽  
Cash Conversion Cycle ◽  
External Capital ◽  
Negative Effect ◽  
Medium Enterprises ◽  
Positive Effect

This study aimed to examine the influence of working capital management and external capital ongoing concern of small and medium enterprises in Indonesia. This study used small and medium listed enterprises in Indonesia as a sample, which were included in the Pefindo-25 index from the year 2009-2016. The results showed that working capital management had a negative effect on SME’s going concern, while the external capital had a positive effect. This study had the implication for small and medium-sized issuers, which was they were expected to be able to accelerate the company's cash conversion cycle to improve working capital management so as to improve the sustainability of their business. In addition, they were expected to consider external capital as an alternative capital to increase competitiveness in the market.

scholarly journals The Impact of Working Capital Management on Profitability: The Case of Small and Medium-Sized Export Companies in Tunisia

2011 ◽  
Vol 15 (3) ◽  
pp. 71-88 ◽  
Author(s):  
Meryem Bellouma
Keyword(s):  
Negative Relationship ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Random Effects Models ◽  
Accounts Receivable ◽  
Cash Conversion Cycle ◽  
Fixed And Random Effects ◽  
Financial Decision ◽  
The Impact

Working capital is an important component in the financial decision of the company. An optimal working capital management is reached through a trade off between profitability and liquidity. This study aims to provide empirical evidence about the effects of working capital management on the profitability of 386 Tunisian export SMEs observed from 2001 to 2008. The results of fixed and random effects models show a negative relationship between corporate profitability and the different working capital components. This reveals that Tunisian export SMEs should shorten their cash conversion cycle by reducing the number of days of accounts receivable and inventories to increase their profitability.

scholarly journals Management of working capital – the Achilles heel of small and medium enterprises (SMEs). The case of Greece

2018 ◽  
Vol 18 (2) ◽  
pp. 5-18 ◽  
Author(s):  
Alina Hyz ◽  
Dimitrios Stavroulakis ◽  
Petros Kalandonis
Keyword(s):  
Small And Medium Enterprises ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Demand Volatility ◽  
Medium Enterprises ◽  
The Relationship ◽  
Of Greece ◽  
Limit Access ◽  
Future Growth

Working capital represents the amount of funds invested in firms' current assets. Optimizing working capital management is a challenge and a necessity for firms especially today due to the demand volatility and limit access to bank credit. This paper investigates the relationship between working capital management and firms' performance in small and medium enterprises in Greece. The results suggests that an effective working capital management is a necessary component of firm's future growth and profitability. The analysis used data for a sample of 459 small and medium enterprises for the period from 2008 to 2012. The paper is organized as follows: in the next section we briefly present the problem based on literature review. This is followed by the presentation of research methodology and the data sources used in the analysis. The results are presented and discussed in section three. Last section summarizes the conclusions and presents further opportunities for research.

scholarly journals PENGARUH PENGGUNAAN INFORMASI AKUNTANSI DAN MANAJEMEN MODAL KERJA PELAKU UMKM TERHADAP KEBERHASILAN USAHA DENGAN UMUR USAHASEBAGAI VARIABEL PEMODERASI (STUDI KASUS PADA INDUSTRI KREATIF DI YOGYAKARTA)

2020 ◽  
Vol 12 (1) ◽  
pp. 19-32
Author(s):  
Khoirunnisa Cahya Firdarini ◽  
Agung Slamet Prasetyo
Keyword(s):  
Structural Equation ◽  
Small And Medium Enterprises ◽  
Accounting Information ◽  
Total Sample ◽  
Creative Industries ◽  
Business Success ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Medium Enterprises

Small and medium enterprises (SMEs) are one of important sector of national economic that have contributed to labor absorption and Gross Domestic Product (GDP). They could survive of financial crisis both in national and global scale. This  research  examines  the  effect  of  accounting information and working capital management toward business success of small and medium enterprise (SMEs) with age of business as moderating variable. The  population of  this  research  are  small and medium enterprises (SMEs) in creative industries sector operated in Yogyakarta district. They are handycraft, culinary and fashion. Based  on  purposive  sampling  method,  total  sample  of  this  research  is  200 SMEs.  Hypothesis  testing  used  is  path analysis using structural equation modelling (SEM). The test result shows that accounting information and working capital management have  positive  and  significant  effect to the success of SMEs.Age of business as moderating variable also have positive  and  significant  effect to the success of SMEs.

scholarly journals Effects of the COVID-19 Global Crisis on the Working Capital Management Policy: Evidence from Poland

2021 ◽  
Vol 14 (4) ◽  
pp. 169
Author(s):  
Grzegorz Zimon ◽  
Hossein Tarighi
Keyword(s):  
High Ratio ◽  
Management Policy ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Conservative Strategy ◽  
Accounts Receivable ◽  
Large Cities ◽  
Cash Conversion Cycle ◽  
Return On Sales

The paper aims to investigate the effects of the COVID-19 pandemic on working capital management policies among Polish small and medium-sized enterprises operating in Group Purchasing Organizations (GPOs). The results show that the firms adopted a moderate–conservative strategy for their working capital management. Moreover, the evidence confirms that the COVID-19 pandemic crisis did not change Working Capital Management (WCM) strategies significantly. The companies that have high financial security as a result of the high ratio of Liquidity, Quick, and cash conversion cycle (CCC) have tried to attract more new customers in the market by increasing the due date of accounts receivable so they can improve their sales performance, and also reduce the liabilities turnover to be able to work with more suppliers in the market. Moreover, among the various WCM strategies, the companies with a higher CCC ratio, along with those whose bulk of current assets consisted of accounts receivable and short-term investments, managed to have higher sales returns. Finally, our outcomes indicate that the firms operating in large cities have lower sales returns, meaning even Polish small and medium-sized enterprises’ ability within GPOs with the aid of the central unit can also get high return on sales (ROS) results.

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