Download or read book The Impact of Working Capital Management on Firm S Profitability Listed in Psx written by Farheen Ramsha and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Working capital management deals with the balance of current assets and liabilities. Working capital management maximizes the level of firms to an optimal value. With time evidence has shown a significant impact of working capital on the performance of firms. Working capital management addresses the management of companies' short-term capital and the objective of working capital management is to endorse satisfying profitability and minimize liabilities.Hence, the study examines the impact of working capital management on automotive manufacturing firms listed on the Pakistan Stock Exchange for the period 2007-2016. Profitability was measured by the performance of the firms by the rate of return on assets as the dependent variable. The cash conversion cycle, average payment period, inventory conversion period, and average collection period determined the working capital of the firms as independent working capital variables. Moreover, the control variable is firm size.The data was examined using EViews (version 10). The finding reveals that the average collection period, inventory conversion period, average payment period, and cash conversion cycle have an insignificant negative relationship with profitability. In the case of firm size, its relationship with profitability is positively significant. The value of R square reveals that our model is capturing 58% variation from independent and control variables. The value of F statistics indicates that our model is well fitted. In general collection payments from customers earlier and paying suppliers longer, keeping the product in stock less time, are all related to positive performance. Therefore, managers can increase a firm's profitability by improving the performance of management of working capital components. The study in this case is done with delicate methods and proper sample models taken from verified sources.

Download or read book Impact of Working Capital Management on the Profitability of Firms written by Safi Khan and published by . This book was released on 2017 with total page 10 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines relationship between measures of working capital management and corporate profitability. Working capital management is an important element of financial management for many firms as they make significant investment in working capital components. Applying fixed effect estimation model, we find a significant negative relation between firm's profitability and various components of the working capital management. These results suggest that managers can improve firm's profitability, and consequently, enhance firm value, through the efficient management of working capital components.

Download or read book Working Capital Management written by Lorenzo Preve and published by Oxford University Press. This book was released on 2010-04-28 with total page 173 pages. Available in PDF, EPUB and Kindle. Book excerpt: Working Capital Management provides a general framework that will help managers understand working capital using a comprehensive approach that links operating decisions to their financial implications and to the overall business strategy. It will also help managers to gain a better understanding of the key drivers to profitability and value creation.

Download or read book The Impact of Working Capital Management on the Profitability of Financial Listed Firms in Palestine written by Hasan Abdul-Hadi and published by . This book was released on 2018 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt: The working capital management plays an important role for success or failure of firm in business because of its effect on firm's profitability. This study aims at providing an idea about the directional effect of working capital management on profitability of financial listed firms in Palestine. The contemplated research will analyze Palestinian listed companies with respect to the optimal mix of their working capital structure as it relates to profitability. This is presently considered an understudied area and will have positive benefit for both professionals and academics. The contemplated research will provide a basis for further research and examination of the domain of working capital structure. Firm Size and firm Growth has a positive impact on the firm's profitability. It is important to focus on the nexus of working capital structure theory, managerial decision-making theory and managerial communication theory to have effective working capital management framework.

Download or read book Working Capital Management and Profitability written by Waseem Ullah Jan and published by LAP Lambert Academic Publishing. This book was released on 2014-07-02 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt: The working capital management plays an important role for success or failure of firm in business because of its effect on firm's profitability as well on liquidity. The working capital management refers to the management of working capital, or precisely to the management of current assets. A firm's working capital consists of its investments in current assets, which includes short-term assets-cash and, inventories, receivable and marketable securities. Therefore, the working capital management refers to the management of the levels of all these individual current assets. The universe of the study is textile industry of Pakistan, which is one of the oldest and the fast developing industry in the large scale sector of Pakistan. The study is based on secondary data collected from listed firms in Karachi stock exchange for the period of 2001-2006 with an attempt to investigate the relationship existing between profitability, and working capital management components for listed firms in Karachi stock exchange. The reason for restricting to this particular time period is that the latest and updated data for investigation is available for this period.

Download or read book Impact of Working Capital Management on Profitability written by rafathunnisa Syeda and published by . This book was released on 2018 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The success of any business depends on its profitability, liquidity, and solvency. Liquidity plays an important role in the successful running of a business. Many prior studies have been conducted to measure the relationship between working capital and profitability. The results showed that the high investment in inventories and receivables is associated with lower financial performance. They found a negative relationship between Return on Assets and Inventory turnover and Cash conversion cycle the present study is designed to know the direct impact of working capital on profitability by choosing the days of collection, days of payment, days inventory converts to sales and finally the cash conversion cycle. This study examines the association between the profitability and working capital using the data of 15 US trading companies for the period of 2015 to 2019. The key points in this study are firstly there exists a negative relationship between the profitability and the average collection period, the lower the average collection period higher will be the profitability, indicating that a decrease in the number of days a firm receives payment from sales affects the profitability of the firm positively. Secondly there is a highly significant positive relationship between average payment period and profitability. This implies that the longer a firm makes the payment to its creditors, the more profitable it is. Thirdly the cash conversion cycle decreases it will lead to an increase in profitability of the firm, and managers can create a positive value for the shareholders which indicates that it has been maintained. The regression analysis showed the value for the R-squared in the model is 0.584, i.e., 58.4% of the variation in the dependent variable Net Profitability is explained by the independent variables.

Download or read book The Impact of Working Capital Management on Corporate Profitability written by Elangkumaran Periyathampy and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Efficient management of working capital ensures a company has sufficient cash flow to meet its short-term debt obligations and operating expenses. The study analysis WCM and corporate profitability of listed manufacturing companies of the CSE in Sri Lanka. A sample of twenty-two listed manufacturing companies selected randomly for the purpose of this study. Data collected from annual reports of the sampled firms for the period 2009-2015. The working capital was determine by the cash conversion cycle and the profitability was measured by return on assets. The study applied panel data models (random effects). The data were analyzed by means of descriptive statistics and GLS random regression analysis using STATA 12. The study finds that there is a significant negative impact of inventory turnover on corporate profitability while debtors turnover insignificant positive affect corporate profitability. In addition, creditors' turnover has significant positive impact on corporate profitability. The results conclude that WCM impact of profitability of listed manufacturing companies in Sri Lanka.

Download or read book The Impact of Aggressive Working Capital Management Policy on Firm s Value written by Abdullah Naqi and published by . This book was released on 2020 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: The study will examine the value of the firm and aggressive working capital management while considering the mediating effect of a firm's profitability. The study consist of 147 non-financial firms listed on the Pakistan Stock Exchange. The study period consists of years from 2009 to 2014. The finding reveals that aggressive working capital financing policy has a significant negative impact on profitability and firm value while aggressive investment policy discloses a significantly positive relationship with profitability. Profitability has a significant and positive impact on the firm's valuation therefore, profitability can mediate the relationship between the aggressive working capital management and the value of the firm. Therefore, we conclude that to enhance profitability through optimization of investment on current assets and by adding the proportion of long term financing in working capital. In the end, we have discussed some of our limitations and future research opportunities.

Download or read book Relationship Between Working Capital Management and Profitability in Retail Sector Companies Listed on the Johannesburg Stock Exchange written by Innocent Gumbochuma and published by . This book was released on 2014 with total page 122 pages. Available in PDF, EPUB and Kindle. Book excerpt: Working capital management is an extremely important area of financial management as current assets normally represent more than half of the total assets of a business. Literature has shown that efficient management of working capital will lead to more profitability and creating more market value. This study sought to ascertain the impact of the working capital management on firm profitability in the retail sector of the South African Johannesburg Stock Exchange listed companies.

Download or read book Impact of Working Capital Management on Profitability in UK Manufacturing Industry written by Senthilmani Thuvarakan and published by . This book was released on 2013 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Working capital management is given higher priorities by the corporate world. Companies which are effectively using their working capital components are likely to have competitive advantage over their competitors. The purpose of this research is to investigate the relationship between the working capital components and corporate profitability in different industries. 60 manufacturing companies, 20 construction companies and 17 telecommunication companies listed on the London stock exchange is used for this research covering the period of 2006-2011. The dependent variable, profitability is measured using gross operating income. The independent variables are receivable days. Payable days, inventory days, cash conversion cycle, debt, and size of the firm. Pearson's correlation and regression analysis to explore the relationship between the profitability and the working capital components. The results show that there is no significant relationship between the working capital components and profitability. There is a negative relationship between gearing and profitability in manufacturing firms.

Download or read book Working Capital Management and Its Impact on Financial Performance written by Rathiranee Yogendrarajah and published by . This book was released on 2014 with total page 8 pages. Available in PDF, EPUB and Kindle. Book excerpt: A Working capital management ensures a company has sufficient cash flow in order to meet its short-term debt obligations and operating expenses. The needs of efficient working capital management must be considered in relation to other aspects of the firms' financial and non-financial performance. An efficient Working Capital Management is expected to contribute to the high financial performance. The main purpose of this study was to investigate the working capital management and its impact on firms' financial performance. The efficiency of working capital management was investigated through the cash conversion cycle. The research problem focused here -- What extent the working capital management influences on financial performance of the trading firms? -- A strong significant relationship between working capital management and profitability has been identified in previous research. It was assumed that -- The efficient working capital management has strong impact on financial performance. -- The dependent variable Return on Assets is used as a measure of profitability of financial performance and its' relationship with working capital management was investigated to find out the results. Samples of 9 trading firms have been selected from the companies listed by the Colombo stock exchange using Statistical Package for Social Sciences (SPSS) for the period of 2004 to 2009 to find out the results. The regression analysis results show that the high investment in inventories and receivables is associated with lower financial performance (ROA). For this analysis the inventories days, accounts receivable days, accounts payable days and cash operating cycle have been used. The findings also revealed that some firms have efficient working capital management and some have inefficient working capital management in the trends of working capital according to the cash operating cycle.

Download or read book Working Capital Management Concepts And Strategies written by H Kent Baker and published by World Scientific. This book was released on 2023-03-21 with total page 543 pages. Available in PDF, EPUB and Kindle. Book excerpt: Working capital refers to the money that a company uses to finance its daily operations. Proper management of working capital is critical to financial health and operational success. Working capital management (WCM) aims to maximize operational efficiency by maintaining a delicate balance among growth, profitability, and liquidity. WCM is a continuous responsibility focusing on a firm's day-to-day operations involving short-term assets and liabilities. By efficiently managing a firm's cash, accounts receivable, inventories, and accounts payable, managers can help maintain smooth operations and improve a company's earnings and profitability. By contrast, poor WCM could lead to a lower credit score, financial insolvency, legal troubles, liquidation of assets, and potential bankruptcy.This book provides an objective look into the dynamic world of WCM. Its coverage extends from discussing basic concepts and their applications to increasingly complex and real-world situations. The book stresses that WCM is a combination of both art and science. This volume spans the gamut from theoretical to practical while offering the right balance of detailed and user-friendly coverage. Readers can gain an in-depth understanding of this subject from experts in this field. Those who want a broad survey will benefit, as will readers looking for more in-depth presentations of specific areas within this field of study. In summary, Working Capital Management: Concepts and Strategies provides a fresh look at this intriguing but often complex subject of WCM.

Download or read book Working Capital Management and Corporate Performance written by Ratnam Vijayakumaran and published by . This book was released on 2018 with total page 15 pages. Available in PDF, EPUB and Kindle. Book excerpt: Working capital that represents a significant portion of firms' investment affects firm's profitability and liquidity. This study examines the performance effects of working capital management using a panel of listed manufacturing companies on the Colombo Stock Exchange (CSE) over the period 2011 to 2016. Controlling for unobservable firm specific heterogeneity and a set of observable firm characteristics, we document that working capital is non-linearly (inverted U-shaped) related to firm profitability. This indicates the existence of an optimal level of working capital for firms that balances the costs and benefits of maintaining working capital and maximizes their performance.

Download or read book Impact of Working Capital Management on Profitability written by Sujeewa Kodithuwakku and published by . This book was released on 2015 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt: In Sri Lankan context, manufacturing sector has been recognized as an important strategic sector for socio-economic development and provides a significant contribution to the growth of the economy (Press Note Annual Estimates of GDP, 2012, p.5). Hence, it plays a vital role, which determines the driving force of the economy (Press Note Annual Estimates of GDP, 2012, p.5). Consequently, manufacturing companies encounter several issues and challenges in the effort of enhancing their profitability and reduce the threat of insolvency. Specifically, the Sri Lankan manufacturing sector is faced with the dilemma of maintaining an appropriate trade-off between working capital (WC) and profitability. In this study an attempt has been made to identify the impact of WC management on profitability of listed manufacturing companies. This study is primarily based on secondary data that were extracted from the annual reports of the 20 manufacturing companies listed in Colombo Stock Exchange (CSE). Balanced Panel Data (BPD) of these 20 manufacturing companies were analyzed by using the Pearson's Correlation and Ordinary Least Squire (OLS) regression model to establish the relationship between WCM and the profitability. The study found a negative relationship between the profitability and Debtor's Conversion Period (DCP), Inventory Conversion Period (ICP) and Cash Conversion Cycle (CCC), but a positive relationship between profitability and Creditor's Conversion Period (CCP). Moreover the financial leverage, sales growth and firm size also have a significant impact on the profitability. Based on the key findings from this study it has been concluded that the management of a firm can create value for its shareholders by reducing the DCP. The management can also create value for its shareholders by increasing inventories to a reasonable optimum level. Firms can also take long period to pay their creditors as far as they do not strain their relationship with them. As a recommendation it is suggested for all the manufacturing companies to have a greater focus on the relationship between WCM and profitability, by adopting an appropriate management which will ultimately lead to higher profitability and lower threat of insolvency.

Download or read book Effects of Working Capital Management and Profitability written by Gamlath G.R.M. and published by . This book was released on 2014 with total page 10 pages. Available in PDF, EPUB and Kindle. Book excerpt: Decisions relating to working capital and short term financing are referred to as working capital management (W. These involve managing the relationship between a firm's short-term assets and its short-term liabilities. The objective of working capital management is to ensure that the firm is able to continue its operations and that it has sufficient cash flow to satisfy both maturing short-term debt and upcoming operational expenses. Working capital management is one of the essential determinants of firms' market value because it directly affects the profitability. This study investigates the relationship between working capital management and profitability of Colombo Stock Exchange (CSE) listed commercial banks in Sri Lanka. The objective of the study is to identify the relationship between the working capital management and profitability and its impact on profitability. The relation between the working capital management and profitability is examined using Pearson correlation analyses and the effects on profitability is found out using the regression analyses by using a sample of 07 annual financial statements covering period 2007-2011 of listed commercial Banks in Sri Lanka. The working capital management represents the variables of the current ratio (CR), loans to deposit ratio (LDR) and cash ratio (CSR) and the profitability including the net profit margin (NPM), return on equity (ROA) and return on capital employed (ROCE)). The conclusion of the study is that The CSR has great impact on NPM and ROA than other components which are influenced by other factors such as savings, interest rates other than CR and LDR. Working capital management has a great impact on the profitability of the Sri Lankan listed commercial banks and the value of the managers of commercial banks will have to increase value of the firm thereby controlling the level of optimal working capital position.

Download or read book Working Capital Management and Profitability A Study of Cement Companies Listed on the Pakistan Stock Exchange written by Bilal Ahmed and published by . This book was released on 2020 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: In dieser Studie wurde die Auswirkung des Working Capital Managements auf die Unternehmensrentabilität anhand von Panel-Daten für eine Stichprobe von 17 an der pakistanischen Börse notierten Zementunternehmen für den Zeitraum von 2014 bis 2018 untersucht. Ziel der Studie war es, die einzelnen Komponenten des Working Capital Managements zu untersuchen und zu bewerten die Bedeutung der Auswirkungen des Working Capital Managements. Zu diesem Zweck wurde die Verwaltung der Vorräte, Forderungen und Verbindlichkeiten zusammen mit dem Bargeldumrechnungszyklus untersucht. Die Untersuchung verwendete sekundäre Ressourcen wie das Datenportal der pakistanischen Börse und Einzelabschlüsse von Unternehmen, um die für die Analyse erforderlichen Informationen zu sammeln. Panel-Datenmethoden wurden verwendet, um die Ergebnisse zu melden, die das Fixed-Effects-Modell, das Random-Effects-Modell und auch die gepoolten gewöhnlichen Least-Squared-Modelle umfassten. Die Studie stellt einen signifikanten negativen Zusammenhang zwischen den Komponenten des Working Capital Managements und der Rentabilität fest. In Bezug auf die *****This study investigated the effect of working capital management on corporate profitability using panel data for a sample of 17 cement companies listed on the Pakistan stock exchange for a period of 2014 to 2018. The study aimed to examine the individual components of working capital management to assess the significance of the impact of working capital management. To achieve this purpose the management of inventory, receivables and payables were examined together with the cash conversion cycle. The research used secondary resources such as the data portal of Pakistan stock exchange and individual company financial statements to collect information necessary for the analysis. Panel data methods were employed to report the results which included the Fixed effects model, random effects model and also the pooled ordinary least squared models. The study finds signif

Download or read book The Effects of Working Capital Management on Mining Firm s Profitability Empirical Evidence from an Emerging Market written by Mutlu Başaran Öztürk and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Working capital management decisions are the most important among the financial decisions in terms of companies. Working capital expresses financing and management of the short-term investment; in other words, profitability and liquidity are among the main factors affecting the objectives of the companies. The management of working capital components in emerging markets such as Turkey, where financial markets have inadequate depth and financial product diversity, with insufficient saving volume and capital accumulation, is an important topic. In this chapter, we examine the relationship between the components of working capital and profitability; a sample consisting of Istanbul Stock Exchange (ISE) listed mining firms for the period of 2009Q4-2015Q3 that has been analyzed under a panel data analysis. The main reason for choosing the mining sector is because it is the most strategic sector in developing countries. As a result, empirical findings of the study show that growth (firm growth in sales) and INVP (inventory period) affect ROA (return on assets), which represent firm profitability positively, while size (firm size) affects firm profitability negatively. On the other hand, the other independent variables included in the regression model LEV (leverage), CCC (cash conversion cycle), and ACRP (accounts receivables period) have no statistically significant effects on firm profitability for mining sector in Turkey.