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 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 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 The Impact of Working Capital Management on the Profitability of a Manufacturing Company written by Jones Jalis and published by . This book was released on 2021-01-21 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt:

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 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 The Effects of Working Capital Management on Profitability written by Shaskia Soekhoe and published by LAP Lambert Academic Publishing. This book was released on 2012 with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt: Is Working Capital Management carried out in the same manner in all countries? How is Working Capital managed in the Netherlands? Does each industry differ in the way Working Capital is managed? The Effects of Working Capital Management on the Profitability of Dutch Listed Firms is a book in which research is conducted in the Netherlands with regards to these questions. This book also includes findings of other researchers in different countries.

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 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 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 Bi Directional Causality Between Working Capital Management and Profitability written by Showkat Busru and published by . This book was released on 2017 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt: Management of short term funds and their disbursement plays a vital role in deciding fate of entity's financial soundness and future prospect. Thus efficient working capital management is prerequisite for business success so has not only remained orbit of many theoretical and empirical studies but also great concern for management and academic experts. Empirical literature in Indian context on this topic not only presents ambiguous results, but is centered mainly on the possible impact efficient working capital management levels on profitability of the companies, disregarding the possibility of reverse causality running from profitability to effective liquidity and working capital management efficiency, except few recent studies from developed nations. Olarewaju M.O & Adeyemi K.O (2013); Awad, I & Jayyar F (2013). Current study is an attempt to shed light on bidirectional causal relationship between working capital management components like liquidity and cash conversion cycle proxies efficiency of the management in formulating and executing growth and sustainability oriented policies and profitability in the Indian listed firms for the period last one decade through use of econometric model of granger causality and other related methods according to need of study. The results failed to support theoretical assumption and strengthened the prior works and revealed that there is no causal relationship but while taking lag of one year results favored the casual relationship between efficiency liquidity and profitability. The study addressing the current issues may frame consciousness among managers and academicians and help to rule out myths and touch the modern horizons of managing daily financial requirements.

Download or read book Working Capital Management WCM and Corporate Profitability CP written by Ajanthan Alagathurai and published by . This book was released on 2014 with total page 8 pages. Available in PDF, EPUB and Kindle. Book excerpt: Working capital is needed for day-to-day operations of a firm. The purpose of this study is to investigate the relationship between working capital management and corporate profitability and to identify the variables that most affect corporate profitability. Working capital management is considered to be a vital issue in financial management decision and it has its effect on liquidity as well as on profitability of the firm. Moreover, an optimal working capital management positively contributes in creating firm value. In this study, three sectors are selected as a sample size: manufacturing (MFG), Beverage Foods and Tobacco (BFT) and Chemical and Pharmaceuticals (CP) sector. The time period is from 2007-2011. The Profitability has been measured in terms of net profit margin (NPM); return on assets (ROA) and return on equity (ROE). Cash conversion cycle (CCC), age of inventory (AI), age of creditors (AC), age of debtors (AD) have been used as explanatory variables whereas liquidity ratio (LR) and current ratio (CR)) and interest coverage ratio (ICR) have been used as control variables. Descriptive statistics, Pearson's correlation and regression analysis are used in the study. The relationship between working capital management and corporate profitability was confirmed. The results which are robust to the presence of endogeneity, demonstrate that managers can create value by increasing their firm's number of day's accounts payable than increasing number of day's accounts receivable and inventories. Equally, shortening the cash conversion cycle also improves the firm's corporate profitability.

Download or read book The Effect of Working Capital Management on the Decisions of Financial Provision and Profitability written by Amir Shams Koloukhi and published by . This book was released on 2018 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the correlation between working capital management and debit structure of the firms and the effect of this correlation on the firms' profitability. If cash flow is the preferred source for financial provision of investments in the projects, it mediates the structure and combination of working capital. The cross-sectional data was in the form of time series, collected from 112 listed firms in Tehran Stock Exchange from 2009-2003. Panel data method and ANOVA estimator were used for model evaluation. Results showed a significant correlation between financial provision decisions and working capital management. Also, financial provision decisions and working capital management have a positive effect on profitability.

Download or read book Impact of Working Capital Management on Firm s Profitability written by Nguyen Bui Thi Ha Thanh and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

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.

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 Policy and Financial Leverage on Financial Performance written by Khalaf Taani and published by . This book was released on 2015 with total page 8 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper aims to determine the impact of working capital management policy and financial leverage on financial performance of Jordanian companies measured in terms of net income, return on equity (ROE) and return on asset (ROA). Pearson's rank correlation test, ANOVA F- test, and multiple regression analysis were used on 45 companies included in the industrial sector in Jordan ranked in terms of gross revenues. Results of the study indicated that firm's working capital management policy, financial leverage, and firm size have significant relation to net income. However working capital management policy has no significant impact on return on equity (ROE) and return on assets (ROA).