scholarly journals The Relationship between Working Capital Management and Profitability of Bumiputera-Controlled Companies in Malaysia

2018 ◽  
Vol 2 (3) ◽  
pp. 24-34
Author(s):  
Fairuz Sofia Kaharuddin ◽  
Ahmad Rizal Mazlan
Keyword(s):  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Trade Off ◽  
Cash Conversion Cycle ◽  
Conversion Period ◽  
Panel Data Regression ◽  
Data Regression ◽  
Collection Period ◽  
The Relationship

This study investigated the relationship between working capital management and profitability of 94 listed Bumiputera-controlled companies in Malaysia for 2006 until 2012. The underlying theory is the trade-off theory of working capital and cash conversion cycle, and its components are used as measures for working capital management. Findings of the panel data regression reveal that inventory conversion period and receivable collection period are significantly negatively correlated to profitability. This suggests that the shorter the period, the higher the profitability of Bumiputera-controlled companies tends to be. However, the cash conversion cycle is significantly and positively correlated to profitability, suggesting that the longer the cash conversion period, the higher the profitability. The payable collection period is not significantly correlated to profitability. The findings of this study assert that in general, Bumiputera-controlled companies are relatively less efficient in its working capital management, as far as the comparison to previous related studies is concerned.

scholarly journals Working capital management and profitability: evidence from Indonesian manufacturing companies

2020 ◽  
Vol 3 (1) ◽  
pp. 36-46
Author(s):  
Irfan Aryawan ◽  
Astiwi Indriani
Keyword(s):  
Stock Exchange ◽  
Manufacturing Companies ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Conversion Period ◽  
Collection Period ◽  
The Relationship

The aims of this study is to analyze the relationship between working capital management and profitability (return on assets) as a dependent variable and cash conversion cycle (CCC), inventory conversion period (ICP), average collection period (ACP) and average payment period (APP) as independent variables with leverage, liquidity, and size as the controlling variables. The sample of this study are manufacturing companies in the Indonesian Stock Exchange 2013-2017. The analysis using OLS showed that the ACP has a negative and significant effect on ROA and the APP has a positive and significant effect on ROA, meanwhile CCC and ICP has a negative and insignificant effect on ROA.

scholarly journals Is working capital management able to increase sustainable growth through asset utilization?

2020 ◽  
Vol 17 (2) ◽  
pp. 136-146
Author(s):  
Yekti Kinasih ◽  
Rambu Dorkas ◽  
Supramono Supramono
Keyword(s):  
Stock Exchange ◽  
Manufacturing Firms ◽  
Sustainable Growth ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Panel Data Regression ◽  
Data Regression ◽  
Strategic Role ◽  
The Relationship

Working capital management has a strategic role to maintain a balance between liquidity and profitability so that firms have greater opportunities to operate sustainably. This study mainly aims to investigate the ability of working capital management to increase sustainable growth through asset utilization. We ran panel data regression on manufacturing firms listed in the Indonesian Stock Exchange for the years of 2010-2017 as our sample. By controlling for leverage, sales growth, and firm size, our empirical results demonstrate that working capital management negatively affects firms' asset utilization. Furthermore, the study also finds that asset utilization positively affects sustainable growth. Finally, we empirically show that asset utilization mediates the relationship between working capital management and sustainable growth. The findings imply that if Indonesian manufacturing firms manage to have efficient working capital management, they are more likely to utilize their assets efficiently which, in turn, will increase their growth optimally, without causing problems to their cash.

scholarly journals The Relationship between Working Capital Management and Profitability: Evidence from Pakistan

2014 ◽  
Vol 20 ◽  
pp. 14-25 ◽  
Author(s):  
Nadeem Iqbal ◽  
Naveed Ahmad ◽  
Zeeshan Riaz
Keyword(s):  
Positive Relationship ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Theoretical Research ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Collection Period ◽  
The Relationship

In this paper secondary data is used for analysis of working capital on profitability. In this research paper we take working capital as independent variable and net operating profit as dependent variable. We have found a significant negative relationship between net operating profitability and the average collection period, inventory turnover in days, average payment period and cash conversion cycle for a sample of Pakistani firms listed on Karachi stock exchange. Previous theoretical research predicts negative relationship between cash conversion cycle and corporate profitability. The results of regression indicate that the coefficient of account receivable is negative; that is, the increase or decrease in average collection period wills significantly affect the profitability of the firm. According to inter-item correlation matrix the relationship of account receivables, account payables and inventory with profit shows positive relationship but cash conversion cycle, financial debt and financial assets shows negative relationship with profitability. Inventory shows the positive relationship with dependent variable which proves that working capital management has a positive effect on firm’s probability.

scholarly journals Study of Working Capital Management on Small and Micro Businesses of Cassava-Based Food in Semarang Regency

JEMAP ◽  
2021 ◽  
Vol 4 (1) ◽  
pp. 73
Author(s):  
Bonifatius Junianto Wibowo ◽  
Widuri Kurniasari ◽  
Ignatius Supriyanto
Keyword(s):  
Raw Material ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Entrepreneurial Spirit ◽  
Conversion Period ◽  
Net Profit ◽  
Result Show ◽  
Collection Period

 This research is conducted to know the condition of small and micro business of cassava –based in Semarang regency related to management of working capital.  Samples of this research are ten small and micro business of cassava-based food in that area. That data was obtained with questionnaires, which distributed to those samples. Interview and observation are also used to complete data from questioner. The data are analyzed by descriptive quantitative and quantitative. The result show that they run their business only to get revenue for meeting their basic needs.  While, on the working capital management, they focus on finished goods inventory rather than on raw material inventory.  The easiness of getting the cassava make them have a few  cassava as inventory.   They order cassava from nearest supplier for making any kinds  of food. Most of working capital is financed by owners equity.    Therefore, they do not dependent on creditors.   Nevertheless, they have not yet included wages of workers to create net profit.  Respectively, inventory conversion period, average collection period,  payables deferral period  and cash conversion cycle do not influence to return on asset. In the future, they can take loan to finance working capital as long as not more than owner’s equity.  They should include wages expense to get profit.  More importantly, they must own entrepreneurial spirit in business.  

scholarly journals Working Capital Management and SMEs Profitability in Emerging Economies: The Ghanaian Case

SAGE Open ◽  
2021 ◽  
Vol 11 (1) ◽  
pp. 215824402198931
Author(s):  
Abudu Braimah ◽  
Yinping Mu ◽  
Isaac Quaye ◽  
Alhassan Abubakar Ibrahim
Keyword(s):  
Method Of Moment ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Efficient Management ◽  
Conversion Period ◽  
Collection Period ◽  
Generalized Method Of Moment ◽  
The Impact

This study empirically examines the impact of working capital management (WCM) on the profitability of Small and Medium Scale Enterprises (SMEs) in the context of a developing economy, Ghana. We analyzed data on 366 SMEs over a 10-year period, spanning 2007 to 2016. Generalized method of moment (GMM) estimation was employed. The results reveal a positive relationship between trade payable period and profitability. The inventory conversion period and cash conversion cycle show a negative association with profitability. The results show an inverted U-shaped relationship between trade receivables collection period and corporate profitability, an indication of an optimal trade receivables collection period that maximizes profitability. Further check suggests a deviation from the optimal trade receivables collection period significantly and negatively affects corporate profitability. The study reveals the need for firms to ensure efficient management of working capital to maximize profitability.

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 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 Dampak kebijakan modal kerja, leverage, dan aset perusahaan terhadap profitabilitas perusahaan yang terdaftar di bursa efek in indonesia periode 2010-2012

2017 ◽  
Vol 20 (1) ◽  
Author(s):  
Agus Zainul Arifin ◽  
Prayogo Indrayang
Keyword(s):  
Stock Exchange ◽  
Random Effect ◽  
Sampling Technique ◽  
Financial Assets ◽  
Working Capital ◽  
Cash Conversion Cycle ◽  
Panel Data Regression ◽  
Data Regression ◽  
Asset Size ◽  
The Relationship

Objective of this study was to determine the relationship between working capital policy with proxy Cash Conversion Cycle (CCC), Leverage, company size, and Financial Assets, as independentvariables, and profitability as the dependent variable on the non-financial companies listed in Indonesia Stock Exchange period 2010-2012. To examine this relationship, using panel data regression. Sampling method was non-probability sampling with purposive sampling technique. The results of the analysis of the evidence obtained in the form of regression model used is Random Effect. Partial test effect prove that the policy of working capital, leverage, asset size, and Financial Assets no effect on profitability. The test results together prove significant effect.

scholarly journals The Relationship Between Working Capital Management And Firms Profitability: An Empirical Investigation For An Emerging Asian Country

2012 ◽  
Vol 11 (8) ◽  
pp. 839 ◽  
Author(s):  
Melita Charitou ◽  
Petros Lois ◽  
Halim Budi Santoso
Keyword(s):  
Empirical Investigation ◽  
Global Financial Crisis ◽  
Asian Country ◽  
Capital Management ◽  
Working Capital ◽  
Return On Assets ◽  
Major Objective ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
The Relationship

The major objective of this study is to examine the relationship between working capital management and firms profitability. Using a dataset of all Indonesian firms over the period 1998-2010, results show that the Cash Conversion Cycle and Net Trade Cycle are positively associated with the firms profitability. Results also show that firms riskiness, as measured by the debt ratio, is negatively related to the firms Return on Assets. The results of this study should be of interest to executives and major stakeholders, such as investors, creditors, and financial analysts, especially after the recent global financial crisis and the latest collapses of giant organizations worldwide.

scholarly journals Influence of Working Capital Management and Policy to Profitability of Retail Trading Sector in Indonesia

2021 ◽  
Vol 04 (12) ◽  
Author(s):  
Eric Tjandra ◽  
Keyword(s):  
Panel Data ◽  
Investment Policy ◽  
Working Capital ◽  
Financing Policy ◽  
Working Capital Management ◽  
Cash Conversion Cycle ◽  
Panel Data Regression ◽  
Data Regression ◽  
Retail Trading ◽  
Tax Depreciation

Working Capital (WC) is an important aspect of any firms because of its correlation to risk (liquidity) and return (profitability). This research examines the influence of WC Management and Policy (WCMP) to profitability of 21 listed retail trading sector firms in Indonesia from 2011-2020 using panel data regression. In this research, WC Management (WCM) is measured by Cash Conversion Cycle (CCC) and its components which are Days Sales Outstanding (DSO), Days Inventory Outstanding, and Days Payable Outstanding (DPO); WC Policy is measured current assets divided by total assets or referred to as WC Investment Policy (WCIP) and current liabilities divided by total assets or referred to as WC Financing Policy (WCFP); and profitability is measured by Earnings Before Interest, Tax, Depreciation, and Amortization Margin (EBITDAM). The results show that firms can increase EBITDAM by shortening CCC, primarily through shortening DIO and lengthening DPO. Further, firms may improve EBITDAM by adopting a conservative WC Policy instead of an aggressive one, which means having higher current assets and lower current liabilities with respect to total assets.

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