Emphasizing the Working Capital Management and Firms’ Profitability: Evidence from Quoted Firms on the Nigerian Stock Exchange

2021 ◽  
pp. 149-162
Author(s):  
Olaoye Festus Oladipupo ◽  
Falana Olatunbosun
Keyword(s):  
Stock Exchange ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management

scholarly journals The impact of Working Capital Management on shareholders’ wealth and profitability: evidence from Colombo Stock Exchange

2018 ◽  
Vol 15 (2) ◽  
pp. 104-115
Author(s):  
Wasantha Perera ◽  
Pradeep Priyashantha
Keyword(s):  
Firm Size ◽  
Regression Models ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Least Square ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Holding Period ◽  
The Impact

The Working Capital Management (WCM) has an important role for the firm’s success or failure, because it directly affects the overall business health of the firm. This study examined the impact of WCM on profitability and shareholders’ wealth using 50 companies listed in different sectors on the Colombo Stock Exchange (CSE) for the period from 2010 to 2015. This sample represents 47% of the selected sectors of CSE. The profitability of the company is measured using gross operating profit (GOP) and shareholders wealth measured by Tobin’s Q (TQ) ratio. The WCM is measured using five independent variables namely stock holding period (SHP), debtors’ collection period (DCP), creditors’ settlement period (CSP), cash conversion circle (CCC) and current assets ratio (CAR). Further, three additional variables such as firm size (SIZE), leverage (LEV) and earning yield (EY) are employed as controlling variables to capture the impact of other performance of the companies.The data were analyzed using ordinary least square (OLS) and panel data regression models. These regression models reveal that there is a significant negative relationship between CCC and dependent variables (GOP & TQ). Further, this relationship has been confirmed by the major components of CCC such as SHP, DCP. Firm size also positively and significantly effects on the firm GOP while negatively effects on the TQ. Further, they revealed that there is a significant positive relationship between LEV and TQ. The study finds that the shareholders’ wealth and profitability can be increased through the efficiency of WCM.

scholarly journals Working Capital Management and Its Impact on Profitability in Tyre Industry: A Study of Selected Companies

2021 ◽  
Vol 2 (1) ◽  
pp. 40-46
Author(s):  
Tushar Rameshbhai Ajmera
Keyword(s):  
Regression Analysis ◽  
Financial Management ◽  
Stock Exchange ◽  
Practical Implication ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Turnover Ratio ◽  
The Impact ◽  
Tyre Industry

Purpose: The main aim of this article is to find out the working capital management and its impact on profitability in Tyre Industry of selected companies which are listed on stock exchange in India. Approach/ Methodology/ Design: For the study, a time span of 8 years from 2011-12 to 2018-19 is considered, and based on it, any relation of net profit margin ratio and working capital components like current ratio, quick ratio, inventory turnover ratio, working capital turnover ratio is considered. The sample is selected based on higher market capitalisation during the study period. Regression analysis is also employed to investigate the impact of WCM on corporate profitability. Findings: The major findings of this study indicate that the profitability of Balkrishana was good   compared to the other companies. The working capital of Ceat shows highly positive working capital management, whereas Apollo shows negative working capital management. These results were identified with the help of accounting tool as Ratio analysis and statistical tools as Regression analysis and ANOVA test for selected data. Practical Implication: The study examines the scenario of tyre industry with the help of working capital management in selected companies. The results of the study could be an indicator of the performance of the selected companies.   Originality/Value:  This paper provides some key insights to health and efficiency of the selected companies. The working capital ratios are indicative of good working capital management, leading to identifying issue in financial management and eventually improving the performance of the tyre industry.

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.

WORKING CAPITAL MANAGEMENT IN TRANSPORT INDUSTRY COMPANIES LISTED ON WARSAW STOCK EXCHANGE

2017 ◽  
Vol 67 (0) ◽  
pp. 115-123
Author(s):  
Małgorzata Jarocka ◽  
Ewelina Mandera
Keyword(s):  
Comparative Analysis ◽  
Stock Exchange ◽  
Strong Tendency ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Purposive Sampling ◽  
Transport Industry ◽  
Warsaw Stock Exchange

Working capital management in transport companies stems from a variety of factors, the structure of assets being one which should be distinguished. In the transport companies listed on the Warsaw Stock Exchange there is a strong tendency to maintain positive working capital. The method of comparative analysis used in the article is based on purposive sampling cases. The aim of this article is to empirically verify the hypothesis that large transport companies listed on the Warsaw Stock Exchange maintain positive working capital.

Current assets management of small enterprises

2015 ◽  
Vol 42 (4) ◽  
pp. 549-560 ◽  
Author(s):  
Haitham Nobanee ◽  
Jaya Abraham
Keyword(s):  
New York ◽  
Small Firms ◽  
Stock Exchange ◽  
Dynamic Panel Data ◽  
Method Of Moment ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Trade Cycle ◽  
Content Type

Purpose – The purpose of this paper is to investigate the relationship between a firm’s net trade cycle, its size and liquidity. Design/methodology/approach – The relation between the firm’s net trade cycle and its liquidity is examined using Generalized Method of Moment Dynamic Panel-Data System Estimation with Robust Standard Errors for a sample of 5,802 US non-financial firms listed in the New York Stock Exchange, American Stock Exchange, NASDAQ Stock Market and Over the Counter Market for the period 1990-2004 (87,030 firm-year observations). The analysis is applied at the levels of the full sample and divisions of the sample by size. Findings – The results show negative and significant relationship between net trade cycle, as a comprehensive measure of efficiency in working capital management, and liquidity for small firms. Originality/value – Most of the existing literature focusses on the large firm’s experience of working capital management. Small firms generally face liquidity problems and have limited access to external capital, and studies on their efficiency in working capital management are scant. Thus the present study is useful in understanding the relation between the firm’s net trade cycle and liquidity of small firms.

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 Policies and Returns of Listed Manufacturing Firms in Ghana

2017 ◽  
Vol 64 (2) ◽  
pp. 255-269 ◽  
Author(s):  
Anokye M. Adam ◽  
Edward Quansah ◽  
Seyram Kawor
Keyword(s):  
Stock Exchange ◽  
Manufacturing Firms ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Financing Policies ◽  
Current Asset ◽  
Investment And Financing ◽  
Management Policies ◽  
Ghana Stock Exchange

Abstract This study sought to determine the effects aggressive/conservative current asset investment and financing policies have on firms′ return for six manufacturing firms listed at Ghana Stock Exchange for a period of 2000-2013. Data were obtained from the annual reports of the firms and the Ghana Stock Exchange. The study adopted longitudinal explanatory non-experimental research design applied to dynamic panel ARDL framework in analyzing the data. The results revealed that the current asset investment and financing policies have highly significant positive effects on returns to equity holders in the long-run. The empirical evidence suggests that conservative current asset investment policies increase firms return while conservative financing policies yields negative returns. The study therefore would enable finance managers to be able to fashion out the appropriate working capital management policies. A firm pursuing conservative current asset investment policy should balance it with aggressive current asset financing policy in order to enhance profitability and create value for their investors.

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