Working Capital Management and Corporate Profitability: Evidence from Panel Data Analysis of Selected Quoted Companies in Nigeria

2009 ◽  
Vol 3 (3) ◽  
pp. 73-84 ◽  
Author(s):  
Olufemi I. Falope ◽  
Olubanjo T. Ajilore
Keyword(s):  
Data Analysis ◽  
Panel Data ◽  
Panel Data Analysis ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management

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.

scholarly journals The Impact of Working Capital Management on Corporate’s Performance: Evidence from Egypt

2020 ◽  
Vol 15 (6) ◽  
pp. 151
Author(s):  
Yasmeen Tarek ◽  
Mary Rafik
Keyword(s):  
Data Analysis ◽  
Financial Management ◽  
Panel Data Analysis ◽  
Corporate Value ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Working Capital Management ◽  
Wealth Maximization ◽  
The Impact

Financial management has two main objectives profit and wealth maximization, well organized management of WC components should contribute to the achievement of these objectives. This study clarified the factors which affect WCM, which consequently will affect the business health as a whole and this will influence corporate ’performance and its corporate value. The study will examine the relation between firms profitability and its corporate value by applying panel data analysis on16 companies registered in the Egyptian stock market during the period from 2013 to 2017.The performance of companies is measured through profitability using return on assets (ROA) and firms value were measured by Tobin’s Q (TQ) ratio. The working capital management was measured by using current assets ratio (CAR), quick ratio (QR) and cash ratio (CR).

Working capital management and firm’s valuation, profitability and risk

2019 ◽  
Vol 15 (2) ◽  
pp. 191-204 ◽  
Author(s):  
Ben Le
Keyword(s):  
Firm Performance ◽  
Panel Data ◽  
Emerging Market ◽  
Firm Valuation ◽  
Capital Management ◽  
Working Capital ◽  
Data Set ◽  
Working Capital Management ◽  
Content Type ◽  
The Impact

PurposeThe purpose of this paper is to examine the effects of working capital management on firm valuation, profitability and risk.Design/methodology/approachThe paper uses a panel data set of 497 firms covering the period 2007 to 2016. The authors test the effects of working capital management on firm valuation, profitability and risk using the panel data methodology that includes firm and year fixed effects regressions.FindingsThe authors find a significantly negative relationship between net working capital (NWC) and firm valuation, profitability and risk. The results suggest that, in managing working capital, firm managers must make a trade-off between their objectives for profitability and risk control. Working-capital management is of particular importance in firms with less access to capital; it is also important when firms are expanding their investments during periods of economic recovery.Originality/valueThis paper contributes to the literature in several ways. First, to my knowledge, it provides the most comprehensive investigation, to date, on the relationship between working capital management and firm valuation, profitability and risk in an emerging market. Second, this study documents the existence of an optimal level of NWC in an emerging market. Third, firm performance, as measured in both market and accounting value, can be improved with efficient working capital management. Finally, the study includes the impact of the business cycle in an analysis of the effects of working capital management on firm performance.

Determinants of working capital: empirical evidence on manufacturing SMEs

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Filipe Sardo ◽  
Zélia Serrasqueiro
Keyword(s):  
Panel Data ◽  
Financial Distress ◽  
Design Methodology ◽  
Positive Impact ◽  
Panel Data Models ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Content Type ◽  
Probability Of Bankruptcy

PurposeThis study seeks to analyse the determinants of working capital of manufacturing small and medium-sized enterprises (SMEs), particularly the effect of the probability of financial distress on working capital.Design/methodology/approachUsing panel data models, the authors analyse a sample of 3994 manufacturing SMEs for the period 2011–2017.FindingsThe results suggest that SMEs pursue conservative working capital management to avoid the failure to fulfil the commitments with creditors. Also, the positive impact of the probability of financial distress on SME working capital suggests that SMEs exposed to a higher probability of bankruptcy invest more in working capital to avoid the risk of default and financing imbalance.Originality/valueThe novelty of this study is to extend the consequences of aggressive or conservative working capital management by analysing the probability of financial distress on working capital.

scholarly journals Two Dimensional Analyses for the Company’s Profitability Under the Working Capital Management: Evidence From Egypt

2020 ◽  
Vol 10 (1) ◽  
pp. 13
Author(s):  
Amira Hassaneen
Keyword(s):  
Panel Data Analysis ◽  
Financial Assets ◽  
Two Dimensional ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Working Capital Management ◽  
The Impact ◽  
Real Assets ◽  
Financial Profitability

The current study focused on the impact of working capital management on the financial profitability of Egyptian companies which lasting at EGX according two dimensional analyses; these dimensional are real assets level measured according to "Return on Assets" with financial assets level measured according to "TOBIN Q" during 2011 to 2018 for 23 companies.The study used unbalanced panel data analysis to examining the impact of the working capital management on the profitability. Finally, the study found two dimensional for the impact of working capital management and corporate's profitability; first according to Cost-Benefits analysis at real assets level measured through "Return on Assets"; second according to Risk Return Trade Off at financial assets level measured through "TOBIN Q".

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