scholarly journals Effects of Working Capital Management and Liquidity: Evidence from the Cement Industry of Bangladesh

1970 ◽  
Vol 6 (1) ◽  
pp. 37-47 ◽  
Author(s):  
Sayeda Tahmina Quayyum
Keyword(s):  
Stock Exchange ◽  
Cement Industry ◽  
The Other ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Management Efficiency ◽  
Time Period ◽  
Inventory Turnover

This paper is an attempt to investigate the effects of working capital management efficiency as well as maintaining liquidity on the profitability of corporations. For this purpose, corporations enlisted with the cement industry of Dhaka Stock Exchange have been selected and the analysis covers a time period from year 2005 to 2009. The purpose of this paper is to establish a relationship which is statistically significant, the other purpose is to help explain the necessity of firms optimizing their level of working capital management and maintaining enough liquidity as it affects the profitability. The result of this study clearly shows significant level of relationship between the profitability indices and various liquidity indices as well as working capital components.KEY WORDS: Working capital management; Liquidity; Cement Industry; Cash Conversion Cycle; Inventory Turnover; Receivables Turnover; Payable Turnover.DOI: http://dx.doi.org/10.3329/jbt.v6i1.9993  Journal of Technology (Dhaka) Vol. 6(1), January-June, 2011 37-47

scholarly journals Promoter ownership and working capital management efficiency of indian manufacturing firms

2015 ◽  
Vol 12 (2) ◽  
pp. 590-599
Author(s):  
Amarjit Gill ◽  
John D. Obradovich ◽  
Harvinder S. Mand
Keyword(s):  
Cash Flow ◽  
Financial Management ◽  
Stock Exchange ◽  
Manufacturing Firms ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Management Consultants ◽  
Cash Conversion Cycle ◽  
Management Efficiency

Poor cash flow leads to insolvency of the firm. One of the most important factors that lead to poor cash flow is the inefficiency of working capital management. This study investigates relationships between promoter ownership and working capital management efficiency of Indian manufacturing firms. A sample of 151 manufacturing firms was selected from Top 500 Companies listed on the Bombay Stock Exchange (BSE) for a period of five years (from 2010-2014). Results indicate that changes in promoter ownership play a role in changing working capital management efficiency of Indian manufacturing firms by reducing their cash conversion cycle and by improving cash conversion efficiency. This study contributes to the literature on the factors that cause changes in working capital management efficiency. The findings may be useful for financial managers, operations managers, investors, financial management consultants, and other stakeholders

scholarly journals THE EFFECTS OF WORKING CAPITAL MANAGEMENT ON THE PROFITABILITY OF NIGERIAN MANUFACTURING FIRMS

2013 ◽  
Vol 14 (3) ◽  
pp. 520-534 ◽  
Author(s):  
Omo Aregbeyen
Keyword(s):  
Stock Exchange ◽  
Manufacturing Firms ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Working Capital Management ◽  
Operating Income ◽  
Cash Conversion Cycle ◽  
Operating Profit ◽  
Inventory Turnover

The efficiency of working capital management (WCM) has implications for firms’profitability. This paper empirically investigates the effects of WCM on the profitability of a sample of 48 large manufacturing firms quoted on the Nigerian Stock Exchange (NSE) for the period 1993 to 2005. It is aimed at filling the gaps in a previous study and contribute to expanding and enriching the literature particularly on Nigeria and at large. The analysis examined the responses of the firms’ profitability to WCM and a number of augmenting factors. Profitability was alternatively measured by gross operating profit (GOI), net operating income (NOI) and return on assets (ROA). Likewise, WCM was measured by the average collection period (ACP), average pay period (APP), inventory turnover days (ITID) and comprehensively by the cash conversion cycle (CCC). The results indicate that the firms’ have been inefficient with WCM and caused significant reductions in profitability. The paper concludes that improving the efficiency of WCM is essential and recommends that manufacturing firms in Nigeria should shorten the ACP, APP, ITID and reduce their CCCs.

scholarly journals Manajemen Modal Kerja Dan Dampaknya Terhadap Nilai Perusahaan Dengan Corporate Governance Sebagai Variabel Pemoderasi

2014 ◽  
Vol 6 (1) ◽  
pp. 68
Author(s):  
Adrianus Dhimas Setyanto ◽  
Ika Permatasari
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Stock Exchange ◽  
Capital Management ◽  
Working Capital ◽  
Corporate Values ◽  
Working Capital Management ◽  
Enterprise Value ◽  
Cash Conversion Cycle ◽  
The Relationship

AbstractThis study aims to determine the effect of working capital management on firm value. Corporate governance is used as a moderating variable in this study to explore the role of corporate governance in the relationship between working capital management with corporate values. Program participants of Corporate Governance Perception Index (CGPI) are used as a sample during the period from 2003 to 2011 and listed on the Indonesian Stock Exchange (IDX). We were using simple linear regression and the testing of moderating effects were calculated by Moderated Regression Analysis (MRA). The results showed that the working capital management has an influence on the value of the firm. However, corporate governance variables failed to moderate the relationship between working capital management and enterprise value. It shows that companies and investors in the market still lack concern for the program response and Corporate Governance Perception Index (CGPI) as an assessment of the application of the principles of corporate governance that has been done by the company .Keywords: Working Capital Management, Cash Conversion Cycle, Corporate Governance, Firm Values

scholarly journals Cash Conversion Cycle and Profitability, Evidence from Jordan

2019 ◽  
Vol 11 (2) ◽  
pp. 81
Author(s):  
Manar Moffadi Al-Mohareb
Keyword(s):  
Stock Exchange ◽  
Theoretical Aspect ◽  
Practical Aspect ◽  
Manufacturing Firms ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Amman Stock Exchange ◽  
The Impact

This study investigates the impact of working capital management and its components on profitability as a practical aspect, and how is compatible with the theoretical aspect. Besides, it examines other financial factors that may affect profitability by using a sample of Jordanian manufacturing firms listed in the Amman Stock Exchange for the period (2016-2018). Theoretically, manufacturing firms that have been studied have current assets over half of their total assets. Therefore, the working capital management role will be clearer on firm profitability.Practically, the results indicate that there is a significant relationship between the cash conversion cycle, which is considered as a proxy of working capital management, and profitability of the manufacturing firms. This provides an opportunity to create value for shareholders by decreasing receivable accounts and inventory, enhancing the profitability of the firms and reducing the collection period and by adopting effective credit policy.

Modifying the cash conversion cycle: revealing concealed advance payments

2014 ◽  
Vol 63 (3) ◽  
pp. 341-353 ◽  
Author(s):  
Anna-Maria Talonpoika ◽  
Sari Monto ◽  
Miia Pirttilä ◽  
Timo Kärri
Keyword(s):  
Empirical Data ◽  
Stock Exchange ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Content Type ◽  
Remarkable Effect ◽  
Cash Conversion Cycle ◽  
Accounts Payable ◽  
Business Practitioners

Purpose – The cash conversion cycle (CCC) is widely used in the academic studies of working capital management and supply chain efficiency. The purpose of this paper is to introduce a modification of this measure that takes into account advance payments as a component of operational working capital. Design/methodology/approach – A new measure, the modified cash conversion cycle (mCCC) is introduced and tested with empirical data of companies in Helsinki Stock Exchange. Findings – The mCCC reveals the real efficiency of operational working capital in companies that receive advance payments to a remarkable extent. Research limitations/implications – The mCCC can be used in empirical analysis in academic studies. In this paper, the empirical data are used only for testing the mCCC. The paper concerns received advance payments, but the mCCC can also be extended also to other components of operational working capital ignored by the traditional CCC. Practical implications – The paper offers insights into the variations of CCC for class teachers, and business practitioners, particularly financiers, who deal with operational working capital, cash flow predictions and calculations. Originality/value – There are current items that may have a remarkable effect on operational working capital, but traditionally only inventories, accounts receivable and accounts payable are discussed. The authors argue that also other current items should be taken into account, if they affect the efficiency of operational working capital. The new mCCC is encouraged to be used instead of the CCC when observing working capital management.

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 Working Capital Management (WCM) and Firm Performance in Emerging Markets: A Case of Bangladesh

2021 ◽  
Vol 10 (1) ◽  
pp. 36
Author(s):  
Rafiqul Bhuyan ◽  
Mohammad Sogir Hossain Khandoker ◽  
Noshin Tasneem ◽  
Mahjuja Taznin
Keyword(s):  
Stock Exchange ◽  
Secondary Data ◽  
Total Asset ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Current Asset ◽  
The Impact

We examine the impact of efficient working capital management on market value and profitability. Using secondary data on selected firms from Dhaka Stock Exchange we explore the effects of various working capital components (i.e. cash conversion cycle (CCC), current ratio (CR), current asset to total asset ratio (CATAR), current liabilities to total asset ratio (CLTAR), debt to asset ratio (DTAR), siz,e and growth) to the firm’s performance by looking firm’s value i.e. Tobin’s Q (TQ) and profitability i.e. return on asset (ROA) and return on invested capital (ROIC). Our results show that, for both food and overall manufacturing sectors, there is a significant association between working capital variables and firm’s value & return on assets, but an insignificant association with return on invested capital.

scholarly journals Working Capital Management and the Profitability of Non- Financial Firms Listed on the Zimbabwe Stock Exchange (ZSE)

2014 ◽  
Vol 9 (1) ◽  
Author(s):  
Walter Gachira ◽  
Washington Chiwanzwa ◽  
Dingilizwe Jacob Nkomo ◽  
Runesu Chikore
Keyword(s):  
Firm Value ◽  
Positive Relationship ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Financial Firms ◽  
Cash Conversion Cycle ◽  
The Impact

Working capital is essential for the day-to-day operations of a firm. The study examines the impact of working capital management on the profitability of non-financial firms listed on the Zimbabwe Stock Exchange (ZSE). Using panel data methodology, the direction and extent of the impact of working capital management on profitability is scrutinised. The regression analysis is based on a panel sample of 39 non-financial firms listed on the ZSE from 2009 to 2013, the period under which the Zimbabwean economy has been operating under the multicurrency system. It was found that there is a positive relationship between debtors’ days and firm’s profitability, a negative relationship between creditors’ days and profitability and a positive relationship between firm’s cash conversion cycle and its profitability. There is some negative relationship between current ratio and profitability, while inventory turnover days and profitability are positively related. Debt to asset ratio as a control variable has a significant negative relationship with firm value and profitability. The results of the study show that for the companies included in the sample, there are mixed effects of the components of working capital on firm performance. Managers can thus create value for shareholders by taking note of the existence of such relationships and take measures that enhance firm profitability.

scholarly journals Working capital management and profitability: evidence from Indonesian manufacturing companies

2020 ◽  
Vol 3 (1) ◽  
pp. 36-46
Author(s):  
Irfan Aryawan ◽  
Astiwi Indriani
Keyword(s):  
Stock Exchange ◽  
Manufacturing Companies ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Conversion Period ◽  
Collection Period ◽  
The Relationship

The aims of this study is to analyze the relationship between working capital management and profitability (return on assets) as a dependent variable and cash conversion cycle (CCC), inventory conversion period (ICP), average collection period (ACP) and average payment period (APP) as independent variables with leverage, liquidity, and size as the controlling variables. The sample of this study are manufacturing companies in the Indonesian Stock Exchange 2013-2017. The analysis using OLS showed that the ACP has a negative and significant effect on ROA and the APP has a positive and significant effect on ROA, meanwhile CCC and ICP has a negative and insignificant effect on ROA.

Providing a New Model for Assessment of Working Capital Management:Evidence from Tehran Stock Exchange

2015 ◽  
Vol 1 (1) ◽  
pp. 108
Author(s):  
Seyed Reza Seyednezhad Fahim ◽  
Meysam Kaviani ◽  
Mohamad Pashaei Fashtali
Keyword(s):  
Financial Management ◽  
Stock Exchange ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Working Capital Management ◽  
Organization Management ◽  
New Model ◽  
Cash Conversion Cycle ◽  
Relationship Of

Working Capital Management (WCM) is one of the key facets of financial management and organization management, for the direct effect it has on company liquidity and profitability. There is a probability of bankruptcy for companies with poor working capital management despite generation of positive return. Current paper explains the relationship of WCM with profitability-based indicators at the hand of a new model. For this purpose, 90 listed companies on Tehran Stock Exchange whose financial data for the period 2008 through to 2012 was available were selected. The results do not confirm significant inverse U-shape relationship of Cash Conversion Cycle (CCC) and Net Working Capital to Total Assets (NWC/TA) as indicators (predictors) of working capital with Return on Assets (ROA), but do indicate a significant inverse U-shape relationship of current ratio and quick ratio with ROA. From the findings, one might infer that each industry has its own optimum current and quick ratios maximizing its return.

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