scholarly journals The Impact of Working Capital Management on Firm Profitability and Value

2021 ◽  
Vol 5 (1) ◽  
pp. 34
Author(s):  
A.G.D.T. Amarasekara ◽  
R.M.S.S. Rathnayake ◽  
C. Pathirawasam
Keyword(s):  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Firm Profitability ◽  
The Impact

scholarly journals The Impact of Working Capital Management on Firm Profitability: Empirical Evidence from the Polish Listed Firms

2020 ◽  
Vol 14 (1) ◽  
pp. 9
Author(s):  
Sorin Anton ◽  
Anca Afloarei Nucu
Keyword(s):  
Empirical Evidence ◽  
Ordinary Least Squares ◽  
Optimum Level ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Listed Firms ◽  
Firm Profitability ◽  
Break Even Point ◽  
The Impact

The purpose of this study is to investigate the relationship between working capital and firm profitability for a sample of 719 Polish listed firms over the period of 2007–2016. The scarcity of empirical evidence for emerging economies and the importance of working capital efficiency motivate the research on the working capital–financial performance relationship. The paper adopts a quantitative approach using different panel data techniques (ordinary least squares, fixed effects, and panel-corrected standard errors models). The empirical results report an inverted U-shape relationship between working capital level and firm profitability, meaning that working capital has a positive effect on the profitability of Polish firms to a break-even point (optimum level). After the break-even point, working capital starts to negatively affect firm profitability. The study brings theoretical and practical contributions. It extends and complements the literature on the field by highlighting new evidence on the non-linear interrelation between working capital management (WCM) and corporate performance in Poland. From the practitioners’ perspective, the results highlight the importance of WCM for firm profitability.

Working Capital Management, Macroeconomic Impacts, and Firm Profitability: Evidence from Indian SMEs

2020 ◽  
Vol 9 (1) ◽  
pp. 144-158
Author(s):  
Ajaya Kumar Panda ◽  
Swagatika Nanda ◽  
Pradiptarathi Panda
Keyword(s):  
Inventory Management ◽  
Negative Relationship ◽  
Least Square ◽  
Small Scale ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Firm Profitability ◽  
Relationship Of ◽  
The Impact

The present study investigates the relationship between working capital management and SME profitability. It also analyzes the impact of macroeconomic impulses on firm profitability through efficient management of working capital in the case of Indian small and medium scale enterprises over the time period spanning from 2010 to 2017 using Feasible Generalized Least Square (FGLS) regression models. The study concludes the negative relationship of account receivables together with a positive relationship of inventories and account payables with SME profitability. It implies the firm managers can maximize SME’s profitability by converting the credit sales to cash as early as possible, by increasing the days of accounts payable and following a conservative inventory management strategy. Changes in economic growth and commercial bank advances to small scale industries are the key macroeconomic determinants that are impacting SME profitability. The results from this paper may guide the firm managers to shape their working capital management strategies to maximize profitability. Policymakers may find the study interesting to identify the macroeconomic parameters that significantly influence Indian SMEs.

scholarly journals THE EFFECT OF PROFITABILITY AND RISK MANAGEMENT ON WORKING CAPITAL MANAGEMENT

2011 ◽  
Vol 10 (1) ◽  
Author(s):  
Mudji Utami
Keyword(s):  
Risk Management ◽  
Regression Analysis ◽  
Manufacturing Sector ◽  
Financial Statements ◽  
Business Risk ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Firm Profitability ◽  
The Impact

This study aims to examine the impact of working capital management on profitability and risks of business companies. Furthermore, this study also examines what are the differences of working capital management industries in the manufacturing sector. Some researchers proved that influence of working capital management on profitability (Rahemanand Nasr 2007; Marc Deloof, 2003 and Hadori, 2005). In addition, Gitman (2009) also states that working capital management has an impact on firm profitability and risk. Business risk of each industry is different, thus working capital management will differ among industries. This study used data from 2001 until 2007 at the manufacturing sector firms which have coherent of annually financial statements during the study period and have been audited. In order to test the hypothesis, this study used regression analysis and analysis of variance. The research proves that working capital management affects profitability and risk of firm manufacturing sector during the period 2001-2007. Moreover, it also proves that there is a difference among working capital management industries in the manufacturing sector.

scholarly journals The Impact of Working Capital Management on Profitability of Global Haulage Company, Ghana

2019 ◽  
pp. 1-17
Author(s):  
Joseph Kwasi Agyemang ◽  
Joseph Yensu ◽  
Marian Ivy Oppong Otchere
Keyword(s):  
Service Sector ◽  
Debt Ratio ◽  
Capital Management ◽  
Working Capital ◽  
Period Range ◽  
Working Capital Management ◽  
Distributed Lag ◽  
Company Limited ◽  
Firm Profitability ◽  
The Impact

The study examines the impact of working capital management on profitability of Global Haulage Company Limited in Ghana. The service sector, which Global Haulage Company Limited forms part accounts for about 51% of national output and this show how vital the service sector has become in terms of job creation and gross domestic product growth in the Ghanaian economy. This study therefore employed the autoregressive distributed lag (ARDL) technique to examine the relationship between working capital management and profitability of firms in Ghana using Global Haulage Company Ltd as a case study with a period range of 1995 to 2013. The regression results showed that debt ratio, firm size and current assets to total assets ratio are negatively related to firm profitability whilst current liabilities to total assets ratio is positively related to firm profitability. The study therefore recommends that, management should use less of debt in financing their activities to be able to increase profit since high debt ratio adversely impact on profitability. Also, aggressive working capital policies should be pursued if management’s goal is to increase profit. In addition, policy makers should check and work on the managerial inefficiencies which are making the firm experience diseconomies of scale.

Sign in / Sign up

Export Citation Format

Share Document