EVALUATION OF FACTORING IN THE COMPANY´S ACTIVITIES IN TRANSPORT SERVICE

2016 ◽  
Vol 10 (6) ◽  
pp. 50-62
Author(s):  
Татьяна Гараева ◽  
Tatyana Garaeva ◽  
Людмила Згонник ◽  
Lyudmila Zgonnik ◽  
Инесса Романовна Романова ◽  
...  
Keyword(s):  
Limited Liability ◽  
Financial Indicators ◽  
Transport Service ◽  
Working Capital ◽  
Tax Base ◽  
Accounts Receivable ◽  
Service Company ◽  
Company Limited ◽  
Accounts Payable ◽  
The Impact

The article presents an analysis of the factoring services market at the national and global levels, and identifies the main factoring market development trends. Based on the material of transport service company, limited liability company "Fairway", the authors substantiate the economic efficiency of factoring as a tool for replenishment of circulating assets of transport companies in the current economic conditions. Accumulation by factoring a number of functions is an important advantage over other forms of funding. This is especially important for small and medium-sized businesses in sphere of transport service that do not have sufficient volume of human and financial resources. Factoring allows to avoid a situation where the liability to tax on income appears before inflow of funds from the sale. Greater incentive for the factoring development for tax optimization is applying of a similar approach to the determination of the date of VAT payment. Funding within the factoring will allow Fairway to solve the problem of shortage of working capital without growth of accounts payable. Factoring has a positive effect on the financial indicators of an enterprise, such as liquidity and solvency. In general, the impact of factoring on the financial indicators of the transport service company "Fairway" is carried out by means of reduction of accounts receivable turnover period (shortening of the financial cycle), increasing the receivables turnover (number of turnovers), the reduction of the value of accounts receivable (release), more efficient use of working capital, increasing the coefficient of instant liquidity, reducing the tax base for income tax.

scholarly journals The Impact of Working Capital Components on Firm Value in US Firms

2017 ◽  
Vol 9 (8) ◽  
pp. 138
Author(s):  
Joseph Brian Cumbie ◽  
John Donnellan
Keyword(s):  
Firm Value ◽  
Economic Value ◽  
Optimal Level ◽  
Future Research ◽  
Curvilinear Relationship ◽  
Working Capital ◽  
Accounts Receivable ◽  
Accounts Payable ◽  
Curvilinear Relationships ◽  
The Impact

Working capital is an important part of any businesses day-to-day operations. However, most businesses do not take into consideration that continuous investment into working capital does not maximize firm value. The specific problem addressed was firm managers that do not understand the optimal level for each component of working capital create sub-optimal value firm; leading to diminished investment returns for shareholders. For this study, 140 firms for the years 2003-2012 were selected from a stratified random sample of firms listed on the Russell 2000 index. Accounts receivable days outstanding, accounts payable days outstanding, and inventory days outstanding were regressed on economic value to determine whether a curvilinear relationship existed. All three models showed a statistically significant relationship to firm value, F(6, 2268), p<.01, R2= .40, F(6, 2268), p<.01, R2= .38, F(6, 2268), p<.01, R2= .39. Recommendations for firm managers included lowering accounts receivable, accounts payable, and inventory days during boom economic times while increasing accounts receivable, accounts payable, and inventory days during recessionary economic times. Consideration for future research into working-capital management and firm value should consider whether different curvilinear relationships exist between firm value and working-capital components during different economic cycles.

scholarly journals The Impact of Working Capital Management on Profitability: The Case of Small and Medium-Sized Export Companies in Tunisia

2011 ◽  
Vol 15 (3) ◽  
pp. 71-88 ◽  
Author(s):  
Meryem Bellouma
Keyword(s):  
Negative Relationship ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Random Effects Models ◽  
Accounts Receivable ◽  
Cash Conversion Cycle ◽  
Fixed And Random Effects ◽  
Financial Decision ◽  
The Impact

Working capital is an important component in the financial decision of the company. An optimal working capital management is reached through a trade off between profitability and liquidity. This study aims to provide empirical evidence about the effects of working capital management on the profitability of 386 Tunisian export SMEs observed from 2001 to 2008. The results of fixed and random effects models show a negative relationship between corporate profitability and the different working capital components. This reveals that Tunisian export SMEs should shorten their cash conversion cycle by reducing the number of days of accounts receivable and inventories to increase their profitability.

Accounts Receivable: Payable Impact on Each Other with Special Reference to Financial Performance—A Study of Small Cap Companies

2020 ◽  
Vol 47 (4) ◽  
pp. 362-373
Author(s):  
Sangeeta Mittal ◽  
Monika
Keyword(s):  
Financial Performance ◽  
Trade Credit ◽  
Unit Root Test ◽  
Effective Management ◽  
Manufacturing Companies ◽  
Causality Test ◽  
Accounts Receivable ◽  
Accounts Payable ◽  
The Impact ◽  
Test Correlation

Trade credit is important as a funding source for companies having a liquidity shortage. Trade credit comprises of both accounts receivable and payable. The financial literature has discussed the impact of accounts receivable or payable on a company’s financial performance. However, there is a lack of studies on the effects of accounts receivable and payable on each other and further its effect on the financial performance of small-cap companies. Financial performance is determined using the profitability and value of the company. The researchers examined the financial performance implications of offering and receiving trade credit for a sample of 193 BSE small-cap manufacturing companies in India during the period 2011–2019. Granger causality test, Levin, Lin and Chu Unit root test, correlation and regression have been used for data analysis. The finding suggested that accounts receivable influenced the use of accounts payable. The aftermath of accounts payables is that it negatively and significantly affected the profitability and had an insignificant relationship with the value of the company. The result implies that effective management of accounts receivable can influence the application of accounts payable that improves a company’s profits and value. The current study is useful for SMEs’ managers in determining the financial performance and capital structure.

How does working capital management affect the profitability of Vietnamese small- and medium-sized enterprises?

2017 ◽  
Vol 24 (1) ◽  
pp. 2-11 ◽  
Author(s):  
Hien Tran ◽  
Malcolm Abbott ◽  
Chee Jin Yap
Keyword(s):  
Global Economy ◽  
Capital Investment ◽  
Raw Materials ◽  
Optimal Level ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Content Type ◽  
Accounts Receivable ◽  
Accounts Payable

Purpose Well-designed and implemented working capital management (WCM) will encourage positive returns for a business and establish the firm’s value, while ineffective management will undoubtedly lead to failure of the enterprise. The paper aims to discuss these issues. Design/methodology/approach In business, fixed capital and working capital are the two main forms of capital used. The current assets used in the business as working capital for day-to-day operations include raw materials, work in progress, finished goods, bills receivable, cash and bank balance. This paper analyses the relationship between WCM and profitability in Vietnamese small- and medium-sized enterprises (SMEs) after integration into the global economy. Findings The results suggest that SME owner-managers can increase their firm’s profitability by reducing the number of days of accounts receivable, accounts inventories and accounts payable to an optimal minimum. In addition, a robustness check of this study indicates that high profitability will be achieved, with an optimal level of working capital investment in accounts inventories, accounts receivable and accounts payable. Originality/value No work of this sort has been applied to Vietnamese circumstances. It is also rare in SE Asia more generally.

Effect of Working Capital on Profitability of Selected Quoted Firms in Nigeria

2012 ◽  
Vol 13 (3) ◽  
pp. 367-381 ◽  
Author(s):  
Olayinka Olufisayo Akinlo
Keyword(s):  
Trade Credit ◽  
Capital Management ◽  
Working Capital ◽  
Credit Policy ◽  
Inventory Policy ◽  
Working Capital Management ◽  
Accounts Receivable ◽  
Financial Firms ◽  
Cash Conversion Cycle ◽  
Accounts Payable

The article examines the relation between working capital management and profitability for a sample of 66 Nigerian non-financial firms for the period 1997–2007. Trade credit policy and inventory policy are measured by number of days accounts receivable, accounts payable and inventories; and the cash conversion cycle (CCC) is used as a comprehensive measure of working capital management. The results suggest that firm’s profitability is reduced by lengthening the number of days accounts receivable, number of days of inventory and number of days accounts payable. The result shows that shortening the CCC improves the profitability of the firms.

scholarly journals Working Capital Management dan Firm Profitability Perusahaan Sektor Manufaktur di Bursa Efek Indonesia dan Bursa Efek Filipina Periode 2014-2018

2020 ◽  
Vol 1 (1) ◽  
pp. 31-42
Author(s):  
Ricky Adiyanto ◽  
Werner Ria Murhadi ◽  
Liliana Inggrit Wijaya
Keyword(s):  
Stock Exchange ◽  
Linear Regression Method ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Accounts Receivable ◽  
Cash Conversion Cycle ◽  
Accounts Payable ◽  
Conversion Period ◽  
Firm Profitability

This study aims to analyze the effect of working capital management on the profitability of companies in Indonesia and Philippines. This study uses secondary data from companies listed in Indonesia Stock Exchange and Philippines Stock Exchange in the 2014-2018 period.  The sample used in this study includes manufacturing sector companies listed in Indonesia Stock Exchange and Philippines Stock Exchange in that period. This research uses multiple linear regression method. Working capital is measured using cash conversion cycle, accounts receivable conversion period, inventories conversion period, and accounts payable deferral period. The results of the Indonesian sample show that the cash conversion cycle and its components, namely the accounts receivable conversion period, the inventories conversion period, and the accounts payable deferral period have a significant positive effect on firm profitability. For the Philippine sample, the result of the study show that the cash conversion cycle and its components does not have a significant effect on firm profitability. Keywords: cash conversion cycle, accounts receivable conversion period, inventories conversion period, accounts payable deferral period

scholarly journals FORECASTING OF PRODUCTION FACTORS FOR EFFECTIVE SOCIO-ECONOMIC DEVELOPMENT OF ORGANIZATIONS IN RURAL AREAS OF THE REGION

2020 ◽  
Vol 35 (1) ◽  
pp. 258-268
Author(s):  
M.T. Lukyanova ◽  
Keyword(s):  
Cash Flow ◽  
Rural Areas ◽  
Effective Management ◽  
Internal Environment ◽  
Working Capital ◽  
Financial Flows ◽  
Production Factors ◽  
Accounts Payable ◽  
The Impact ◽  
Negative Factors

Effective management of financial flows ensures the solvency of the enterprise, helps to accelerate the turnover of assets and accounts payable, minimize the financial cycle, the release of working capital on this basis and reduce financial dependence on sources of borrowed capital. Evaluation of the criteria for the effectiveness of money management and identification of the reasons for the deviation of indicators from the planned values allow the company to respond quickly to changes in the external and internal environment, to equalize the impact of negative factors. The sources of cash flow are funds received in three main areas, come from operational, investment and financial activities. When analyzing net cash flow, it is possible to determine which of these areas negatively affects the value of net cash flow.

scholarly journals The Effects Of The Great Recession On Corporate Working Capital Management Practices

2012 ◽  
Vol 11 (7) ◽  
pp. 753
Author(s):  
Rakesh Duggal ◽  
Michael C. Budden
Keyword(s):  
Management Practices ◽  
Negative Relationship ◽  
Shareholder Wealth ◽  
Working Capital ◽  
Capital Theory ◽  
Accounts Receivable ◽  
The Great Recession ◽  
Cash Conversion Cycle ◽  
Accounts Payable ◽  
Firm Profitability

Working capital theory prescribes using the optimal amount of net working capital to maximize shareholder wealth. Evidence from multiple countries indicates a negative relationship between the cash conversion cycle or net working capital and firm profitability. However, severe economic conditions may force firms to change their inventory, accounts receivable, and/or accounts payable policies, causing the firms to use more/less net working capital. Taking a sample of non-financial S&P 500 firms, many of which are multinationals, this study finds significant changes in the cash conversion cycle in 2010 for some industries. Also, it appears firms in general held more net working capital in order to face new economic challenges.

scholarly journals Incidencia del capital de trabajo en la rentabilidad de la industria de alimentos Tsáchila “El Gustador”

ECA Sinergia ◽  
2020 ◽  
Vol 11 (3) ◽  
pp. 50
Author(s):  
María Enélida Vera Saca ◽  
Evelyn Dayana Cedeño Holguín ◽  
Ximena Leticia García Zambrano
Keyword(s):  
Data Collection ◽  
Food Industry ◽  
Working Capital ◽  
Short Term ◽  
Accounts Receivable ◽  
Palabras Clave ◽  
The Future ◽  
Mixed Approach ◽  
The Impact

  La presente investigación tiene como objetivo analizar el capital de trabajo y el impacto en la rentabilidad de la industria de alimentos Tsáchila “El Gustador”. La metodología utilizada tuvo un enfoque mixto y es de carácter no experimental, descriptivo y explicativo, por lo que se implementaron técnicas como la encuesta, entrevista y observación para la recolección de datos, los mismos que después de haber sido analizados e interpretados mostraron que existen deficiencias respecto a la administración de las cuentas del activo y pasivo a corto plazo, situación que afecta directamente a la liquidez de la industria y la determinación de inversión en el capital de trabajo; identificando que este hecho tiene su origen por una deficiente gestión del inventario y de las cuentas por cobrar pudiendo afectar en un futuro a las ventas de la empresa y por ende a su rentabilidad.   Palabras clave: productividad; liquidez; activo corriente; pasivo corriente.   ABSTRACT The objective of this research is to analyze the working capital and the impact on the profitability of the Tsáchila “El Gustador” food industry. The methodology used had a mixed approach and is non-experimental, descriptive and explanatory, so techniques such as survey, interview and observation were implemented for data collection, which after being analyzed and interpreted showed that there are deficiencies regarding the administration of the short-term asset and liability accounts, a situation that directly affects the liquidity of the industry and the determination of investment in working capital; identifying that this fact originates from poor inventory and accounts receivable management, which may affect the company’s sales in the future and therefore its profitability.   Keywords: productivity; liquidity; current active; current liabilities.

Managing Economic Calculations of a Company

2015 ◽  
Vol 4 (4) ◽  
pp. 23-27
Author(s):  
Ровенский ◽  
Yu. Rovenskiy ◽  
Наточеева ◽  
N. Natocheeva ◽  
Белянчикова ◽  
...  
Keyword(s):  
Financial Performance ◽  
Debt Management ◽  
Working Capital ◽  
Credit Policy ◽  
Accounts Receivable ◽  
Accounts Payable ◽  
Enhance Efficiency ◽  
A Company ◽  
Financial Losses ◽  
Sources Of Capital

The paper considers the issues of how to manage the accounts receivable and accounts payable based on the findings of analysis of thereof. The authors propose to sort out definite stages in debt management and suggest ways to calculate the working capital amount to be allocated to accounts receivable; to assess the company financial performance, subject to the provision of onemonth and three-month discounts to debtors, and to evaluate the effect of the increase in accounts receivable in the upcoming period. All the above help to enhance efficiency of the company’s credit policy and of the accounts payables management and also allow to reduce financial losses related to attracting additional sources of capital.

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