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 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 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 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 Working Capital Management for multinational corporations written by David Federhen and published by GRIN Verlag. This book was released on 2004-07-13 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2004 in the subject Business economics - Business Management, Corporate Governance, grade: A = 1, International University in Germany Bruchsal (School of Business Administration), language: English, abstract: Working Capital Management’s [hereafter abbreviated WCM] accepted purpose has been the management of a firm’s current assets and current liabilities in a way that achieves the optimum balance between liquidity and profitability. On the one hand, obviously, a high level of net working capital implies funds invested in current assets that increase a firm’s liquidity but reduces its returns, because current assets are less profitable than long-term assets. On the other hand, however, a low level of net working capital results in increased profitability, since funds are put to better use, but increases the firm’s risk of technical insolvency. The bottom line is that any suboptimal level of net working capital in the end reduces the return to shareholders by lowering the firm’s value (Gitman, 2000, p. 616). However, “[t]he ‘collect early, push out the product and pay late’ attitude, familiar to many treasurers, squeezes both customers and suppliers and [...] is increasingly recognized as short -term and potentially damaging to business” (Hall, 2002, p. 29). Therefore, it is of supreme importance to understand the complex and not openly visible ties of working capital and its components to a company’s strategy and operations, rather than treating WCM as an isolated task. WCM for multinational corporations is in its core very similar to purely domestic WCM. However, in the international realm there exist a few essential differences that add complexity. Consider “the impact of currency fluctuations, potential exchange controls, and multiple tax jurisdictions [...], in addition to the wider range of short -term financing and investment options available” (Shapiro, 2005, p. 516). This paper will discuss the main components of WCM (international cash management, accounts receivables/payables, etc.) as well as the implications of managing working capital in the international sphere, while taking into consideration a more profound approach to WCM that goes beyond the superficial understanding of working capital as an isolated item solely under the control of the finance or treasury department. [...]
Download or read book Working Capital Management written by A. Vijay Kumar and published by Northern Book Centre. This book was released on 2001 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: The study of working capital is of major importance to internal and external analysis because of its close relationship to current day-to-day business. In fact, the study of working capital management needs special attention for the efficient working and survival of a business. It has been often observed that the shortage of working capital leads to the failure of a business. The proper management of working capital may bring about the success of a business firm. To run the business smoothly and to meet the day-to-day operational requirements, working capital funds are very essential. With this background in view, the present study was undertaken for a proper insight into the Management of working capital in the sugar industry. The book provides multidirectional and multidimensional investigation of various aspects of working capital management. The book discusses all the important aspects in a systematic manner. Apart from its extensive coverage and lucid presentation, the strength of the book lies in its Indian background. This book will be of immense use particularly to University and College teachers, Chartered Accountants, Company Secretaries, M.Com. B.Com., and MBA students and other professional courses. In addition, it would be a useful reference book for researchers and Financial Managers.
Download or read book The impact of working capital management on the profitability of a manufacturing company written by Jones Jalis and published by GRIN Verlag. This book was released on 2021-02-22 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt: Bachelor Thesis from the year 2018 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 4.5/5.0, , course: Accounting and Finance, language: English, abstract: This study aims to evaluate the impact of working capital management and its main components on the profitability of manufacturing companies having Nigeria Bottling Company as the case study. The study is restricted to manufacturing companies (Nigeria Bottling Company) and limits itself to the information in the annual report and accounts of the company under review. This study covers a period of eight (8) years (2009-2017). Three objectives, research question and hypotheses which will serve as a guide for the project writing giving the work good direction, were formulated. The Research design and study used where Ex Post-facto design and secondary source of data respectively, population of the study is the manufacturing companies represented by Nigeria Breweries Company PLC. The data collected will be analyzed using multiple regression and simple regression to establish the relationship between both variables used in the work.
Download or read book Essentials of Working Capital Management written by James Sagner and published by John Wiley & Sons. This book was released on 2010-11-23 with total page 293 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive primer for executives and managers on working capital management With limited access to credit and short term funding, it is increasingly important that companies focus on working capital management to free up funds and optimize liqidity. Written in the easy-to-follow Essentials Series style, Essentials of Working Capital Management covers the main components of working capital. Covers the latest trends around working capital Discusses a range of working capital topics, including cash management, banking relations, accounts receivable, inventory, accounts payable, and foreign exchange Analyzes the efficient utilization of current assets and liabilities of a business through each phase of the operating cycle Examines the planning, monitoring, and management of the company's collections, disbursements and concentration banking Explores the gathering and management of information and forecast data to effectively use funds and identify risk Focused on how businesses can continue to be successful in these difficult times, specifically in relation to the limited credit available to businesses, this book puts practical guidance at your fingertips so you can put them to work right away. A comprehensive case introduces each major section of the book, and suggested solutions are included in a book appendix.
Download or read book Working Capital Management written by N.K. Jain and published by APH Publishing. This book was released on 2004 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Working Capital Management written by James S. Sagner and published by John Wiley & Sons. This book was released on 2014-08-25 with total page 310 pages. Available in PDF, EPUB and Kindle. Book excerpt: Stay liquid, think global, and better manage resources with this authoritative guide Working Capital Management is a comprehensive primer on keeping your business financially competitive in the face of limited access to short-term funds. With detailed insight applicable to each phase in the business cycle, this authoritative guide helps managers revamp current practices for more efficient use of assets and liabilities, including more stringent monitoring and planning of collections, disbursements, and balances. Readers will learn how to minimize investments in idle resources, and how to maximize the use of forecast data to better identify risk and the optimal use of available funds. Case studies illustrate the practical applications of the ideas presented, with particular attention given to cash budgeting, forecasting, banking relationships and other common scenarios with specific requirements. Managing a company’s short-term resources is both an art and a science. Effectively maintaining funds for ongoing activities – and keeping those funds liquid, mobile, and available – is a masterful skillset lacking in business. Working Capital Management offers practical advice for managers in this challenging position, providing guidance that helps them: Learn the specific metrics at work in capital management, and the problems that they can cause Improve cash management with robust fraud protection and better use of short-term instruments Manage the issues that arise from accounts receivable, inventory, payables, information management, and international sources Develop an effective management system for key points in the working capital cycle The recent liquidity crisis in the U.S. has thrown the spotlight onto those companies that have adjusted well to credit contraction and the weakened economy, and these success stories – some of which are noted in the book – demonstrate that a positive business outcome can be accomplished. Working Capital Management provides a clear look at a complex issue, with practical, actionable, sustainable advice.
Download or read book Is Working Capital Management a Key Determinant on Corporate Profit written by Hong Yuh Ching and published by LAP Lambert Academic Publishing. This book was released on 2012-06 with total page 80 pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this book is to study the impact of the working capital management in corporate profit. Moreover, to study whether this impact is distinct for companies that use working capital intensively when compared with companies that use fixed capital intensively in their business environment. The authors selected 33 companies from the industrial sector in Brazil in two distinct groups. The first group is formed of companies from the cyclical consumer goods industry with current asset greater than 50% of their total asset. The other one is non-cyclical goods industry, with companies with non-current asset concentrated in fixed asset. The authors applied multivariate statistical methods to identify the working capital management together with other main components of financial structure. The working capital indicators were less able to explain the behavior of corporate profit and this inability was similar for both groups of companies. This raises the issue of the real importance of working capital management on corporate profitability, when compared to the other components involved. The findings in the book corroborate for a lower importance of working capital management.
Download or read book Relationship of Working Capital Management with Profitability written by Habib Ahmad and published by LAP Lambert Academic Publishing. This book was released on 2015-12-03 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is written on the measurement of the profitability in the correspondence of all measures of working capital management which are Average Collection Period, Inventory Conversion Period, Average Payment Period and Cash Conversion Cycle. This research is on the Food & Personal Care Sector in Pakistan as there no other significant research done on this topic before. Following research questions were framed: 1: What factors affect a performance of firm's working capital management? 2: How efficiently a firm converting its working capital into ready money? 3: How company value enhances through efficient working capital management? The analysis is limited to five years of data study from 2010-2014. Due to specific nature of study, firms in financial and other manufacturing sectors are excluded. All firms of Food and Personal care products have not been included in research sample. Certain firms are excluded due to their particular type of activity. Due to shortage of latest literature in the context of Pakistan's WCM has narrowed down our research output. Lastly, overall shortage of time is the main factor that restricted the output of our study.
Download or read book Exploring the Relationship Between Working Capital Management Profitability and Capital Structure written by Abdalla Geth Abdussalam and published by . This book was released on 2017 with total page 8 pages. Available in PDF, EPUB and Kindle. Book excerpt: Objective - This paper explores the relationship between working capital management (WCM), profitability and capital structure. A preliminary framework provides an understanding of the role of WCM components with capital structure and profitability.Methodology/Technique - From the review of empirical studies it is confirmed that WCM is a main component in the financial aspects of the firms as even though WCM is targeted for the short-term decisions it has effect on the firm for the long-run.Findings - Companies need to use working capital policy and procedures in order to navigate performance. Emphasizing on WCM would lead to formal cost controls and performance together with firm's growth and productivity. The framework is set to help financial manager of the firms to balance the costs and benefits of debt and equity and reduce common obstacles on managing cash flows for long-term fixed investment.Novelty - The preliminary framework is original and unique that will contribute towards the enrichment of relevant literature. Practically, this study contributes to provide a better understanding of the managers and enable them to apply WCM strategies and make sure the firm is able to meet the stakeholder requirements.Type of Paper - Review.
Download or read book Working Capital Management written by Krish Rangarajan and published by Excel Books India. This book was released on 2006-08 with total page 276 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Working Capital Management Text And Cases 7Th Rev Ed Royal Size 2003 written by V.K. Et Al. Bhalla and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Management Of Working Capital Is An Important And Time Consuming Aspect Of Managerial Finance. Sufficient Working Capital Must Be Provided In Order To Take Care Of The Normal Process Of Purchasing Raw Materials And Supplies, Turning Out Finished Products, Selling The Products, Waiting For Payments To Be Made. If The Original Estimates Of Working Capital Are Insufficient, Some Emergency Measures Must Be Restored To Or The Business Will Come To A Dead Stop. Inadequate Levels Of Working Capital Can Result In Serious Financial Difficulties, And Even Bankruptcy; Excessive Levels Are Likely To Reduce Corporate Profitability And Ultimately Cause The Firm S Effectiveness And Market Value To Decline.For The Students Of Mba/Commerce/Business Economics At Various Universities/Institutes, Chartered Accountants, Company Secretaries And Other Professional Courses, The Text Is Designed To Fill The Gap And Also Transmit Some Of The Excitement Of Current Thinking And Controversy. The Detailed Knowledge Gained By The Reader Should Make Him More Conversant With The Discipline And Should Provide A Strong Conceptual Foundation.
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 Lauritz Lindig and published by . This book was released on 2013 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt:
