scholarly journals Location, Working Capital, Corporate Governance, and Profitability: The Case of Indonesian Manufacturing Firms

2021 ◽  
Vol 22 (2) ◽  
pp. 881-900
Author(s):  
Irene Rini Demi Pangestuti ◽  
Komang Yuli Pridarsanti ◽  
Robiyanto Robiyanto
Keyword(s):  
Corporate Governance ◽  
Significant Influence ◽  
Stock Exchange ◽  
Manufacturing Firms ◽  
Working Capital ◽  
Return On Assets ◽  
Current Ratio ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Good Corporate Governance

This study scrutinizes the effect of location, working capital and corporate governance toward return on assets (ROA) in Indonesian manufacturing firms. 61 manufacturing firms listed on the Indonesia Stock Exchange were taken as samples in this study. The results show that location does not affect manufacturing firms’ profitability. Furthermore, this study proves that working capital management, as measured by current ratio (CR) and quick ratio (QR), has a positive and significant influence on return on assets (ROA), but cash ratio (CR) and the cash conversion cycle does not have a significant influence on return on assets (ROA). This study also found that the Good Corporate Governance Index (GCGI) has a positive and significant influence on return on assets (ROA) in Indonesian manufacturing firms.

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.

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 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.

Effects of Working Capital Management on Profitability: A Case of Nepalese Manufacturing Firms

2021 ◽  
Vol 5 (1) ◽  
pp. 130-147
Author(s):  
Phadindra Kumar Poudel ◽  
Pujan Maharjan
Keyword(s):  
Significant Relationship ◽  
Stock Exchange ◽  
Capital Management ◽  
Working Capital ◽  
Current Ratio ◽  
Cross Sectional ◽  
Working Capital Management ◽  
Listed Firms ◽  
Financial Firms ◽  
Cash Conversion Cycle

The study deals with the relationship between firm characteristics of working capital management and firm profitability in Nepal. It examines if firm performance, return on assets is related to cash conversion cycle, days’ sales outstanding, days’ inventory outstanding and current ratio. The study is based on pooled cross-sectional data of 10 non-financial firms from 2071/72 to 2075/76 of listed firms in the Nepal Stock Exchange. The study employed descriptive and causal-comparative research design to attainthe purpose of this study. The result reveals that the current ratio has a positively significant relationship with profitability and days’ sale outstanding has negatively significant relationship with the financial performance of the firm.

scholarly journals Pengaruh Kinerja Keuangan dan Tata Kelola Perusahaan Terhadap Nilai Perusahaan pada Industri Telekomunikasi di Bursa Efek Indonesia

2018 ◽  
Vol 10 (1) ◽  
Author(s):  
Monica Paramita Ratna Putri Dewanti ◽  
Hamfri Djajadikerta
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Significant Influence ◽  
Firm Value ◽  
Audit Committee ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Return On Assets ◽  
Current Ratio ◽  
Equity Ratio

Investor as a principal want to maximize whealth and prosperity by increasing firm value. Firm value for companies listed as issuer in Indonesia Stock Exchange can be reflected through share price. Firm value can be affected by several factors, such as financial performance and corporate governance. This research aimed to examine the influence of financial performance and corporate governance to firm value in sub-sector telecomunication industry which listed in Indonesia Stock Exchange during 2011 to 2016. The dependent variable is firm value. Meanwhile the independent variables are (1) financial performance which measured by current ratio, receivable turnover, debt to equity ratio, return on assets, and earnings per share and (2) corporate governance which measured by percentage of institutional ownership, percentage of independent board of commissioners, and presence of the audit committee. The result showed that current ratio, receivable turnover, debt to equity ratio, earning per share, and presence of the audit committee partially had no significant influence to firm value. Meanwhile return on assets, percentage of institutional ownership, and percentage of independent board of commissioners partially had significant influence to firm value. Simultaneously current ratio, receivable turnover, debt to equity ratio, return on assets, earnings per share, percentage of institutional ownership, percentage of independent board of commissioners, and presence of the audit committee had significant influence to fim value. Keywords:Financial Performance, Corporate Governance, and Firm Value

scholarly journals Apakah Profitabilitas Memediasi Pengaruh Manajemen Modal Kerja terhadap Nilai Perusahaan?

2021 ◽  
Vol 3 (2) ◽  
pp. 103-114
Author(s):  
Evan Yulandreano ◽  
Apriani Dorkas Rambu Atahau ◽  
Imanuel Madea Sakti
Keyword(s):  
Firm Value ◽  
Positive Impact ◽  
Stock Exchange ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Company Value ◽  
Panel Data Regression

This study aims to examine the effect of working capital management on firm value with profitability as a mediating variable. This study uses a sample of 18 retail companies listed on the Indonesia Stock Exchange from 2014 to 2018. Working capital management is measured by Cash Conversion Cycle (CCC), profitability is measured by Return on Assets (ROA), and company value is measured by Tobins Q. Panel data regression is conducted to test the direct effect, followed by the Sobel test to test for the indirect effect. The results showed that working capital management increased firm value directly and indirectly through profitability. Working capital management with a shorter cycle results in greater profitability, thus driving firm value. The implication of this research is that retail companies are expected to shorten the company's cash cycle so that it has a positive impact on the company's profitability and value. DOI: https://doi.org/10.26905/afr.v3i2.5452

scholarly journals Impact of Working Capital Management on Profitability and Value of Firm: A Study of Manufacturing Sector of Pakistan

2018 ◽  
Vol 14 (2) ◽  
pp. 1-12
Author(s):  
Munawar Shabbir ◽  
Keyword(s):  
Stock Exchange ◽  
Manufacturing Sector ◽  
Generalized Method Of Moments ◽  
Manufacturing Firms ◽  
Raw Material ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Value Of Firm

Manufacturing is third largest sector of Pakistan's economy. The manufacturing firms convert raw material to finished goods that is useful for people. The whole process (raw material to end product) requires huge amount of working capital. Any anomaly in working capital management directly effects on performance, profitability and value of firm. The present study explores impact of working capital management on profitability as well as on value of firm. The study collects random sample of 30 manufacturing firms registered on Pakistan Stock Exchange for twelve years (2005 to 2016). The regression models were estimated using Generalized Method of Moments. The results showed profitability and value of firms decrease with increase in receivable and inventory turnover because delay in receivables or sale of inventory enhance financing needs for working capital. Liquidity contribute largely in increase profitability as compared to value of firm. However, some variables showed partial results for both models for example profitability increased with rise in growth and cash conversion cycle. Value of firm was decreased with delay in accounts payable turnover because it cased distrust of supplier and investors. We expected size will increase profitability and value but contrary results expressed decline in both. The research findings suggest firms in Pakistan should focus on efficient working capital management for better profitability and value addition of firm.

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