Cash Conversion Cycle and Firms’ Profitability – A Study of Listed Manufacturing Companies of Pakistan

Anser, Raheem Anser Raheem

doi:10.9790/487x-0828387

Cited by 28 publications

(23 citation statements)

References 21 publications

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“…This effect means that the shorter the cash conversion time is, the higher the profits generated by the agriculture and food companies in Thailand. These findings are consistent with other empirical research results (Oseifuah & Gyekye, 2016;Anser & Malik, 2013;Majeed et al, 2013;Murugesu, 2013;Attari & Raza, 2012).…”

Section: Correlation Analysissupporting

confidence: 93%

“…Findings from Table 3 indicate that moderating variable size does not have any significant relationship with cash conversion cycle or profitability. This is also confirmed by previous studies (Panigrahi, 2013;Anser & Malik, 2013). However, results from Table 3 (Pearson correlation) indicate that the moderating variable debt ratio has a significant negative relationship with return on assets (ROA) and cash conversion cycle.…”

Section: Correlation Analysissupporting

confidence: 89%

“…In addition, the company's characteristics such as size and debt ratio can also significantly affect firm profitability. Chatterjee (2012) and Majeed et al (2013) reported a positive relationship between size and profitability while Panigrahi (2013) and Anser and Malik (2013) indicated no link between them. Separate studies (Yucel & Kurt, 2002;Raheman & Nasr, 2007;Bolek, 2013) looking at the relationship between debt ratio and profitability also showed mixed results.…”

Section: Effects Of Cash Conversion Cycle On Profitabilitymentioning

confidence: 99%

“…Separate studies (Yucel & Kurt, 2002;Raheman & Nasr, 2007;Bolek, 2013) looking at the relationship between debt ratio and profitability also showed mixed results. While Yucel and Kurt (2002), Raheman and Nasr (2007) and Bolek (2013) highlighted the negative relationship, Panigrahi (2013) and Anser and Malik (2013) maintained that there is no relationship between debt ratio and profitability.…”

Section: Effects Of Cash Conversion Cycle On Profitabilitymentioning

confidence: 99%

“…Much research has been done in the area of liquidity, working capital, cash conversion cycle, firm size, and their influence on profitability but there has been no conclusive evidence showing the negative or positive relationship between CCC and profitability. A few studies (Kaur & Singh, 2016;Panigrahi, 2013) have reported the positive relationship whereas others (Oseifuah & Gyekye, 2016;Anser & Malik, 2013;Majeed, Makki, Saleem, & Aziz, 2013;Murugesu, 2013;Attari & Raza, 2012) have reported on the negative relationship showing the inconsistency. To some extent, some studies (Hemalatha & Kamalavalli, 2017;Ikechukwu & Nwakaego, 2016;Bolek, 2013;Wongthatsanekorn, 2010) have even reported that there are no relationship between CCC and profitability.…”

Section: Introductionmentioning

confidence: 99%

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The Effects of Cash Conversion Cycle on Profitability: An Insight into the Agriculture and Food Industries in Thailand

Linh¹,

Mohanlingam²

2018

AJBA

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Manuscript type: Research paper. Research aims: This study investigates the relationship between cash conversion cycle and profitability that exists in the agriculture and food industries in Thailand. It specifically aims to examine the influence of production cycle, cash collection cycle, and cash payment cycle on profitability. In addition, it also aims to measure the influence of control variables such as size and debt ratios have on profitability. Design/ Methodology/ Approach: This study analysed the data of 34 listed companies in agriculture and food industry in the Stock Exchange of Thailand from 2009 to 2013. Pearson's correlation and the regression analysis approach were used to examine the relationship between cash conversion cycle and profitability. Research findings: The results indicate that cash conversion cycle (CCC) has a significant inverse relationship with profitability in the agriculture and food companies in Thailand. Further, production cycle and debt ratio were found to have a significant negative relationship with return on assets (ROA) while payment cycle and size have a positive relationship with return on equity (ROE). No significant relationship was found between cash collection cycle and profitability. Theoretical contributions/ Originality: This study expands on the theoretical concepts of cash conversion cycle and its effects on profitability. Although studies have been done on manufacturing

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Section: Correlation Analysissupporting

confidence: 93%

Section: Correlation Analysissupporting

confidence: 89%

Section: Effects Of Cash Conversion Cycle On Profitabilitymentioning

confidence: 99%

Section: Effects Of Cash Conversion Cycle On Profitabilitymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The Effects of Cash Conversion Cycle on Profitability: An Insight into the Agriculture and Food Industries in Thailand

Linh¹,

Mohanlingam²

2018

AJBA

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Cyberattacks, cash conversion cycle, and corporate performance

Harris,

Nguyen

2023

J Corp Accounting Finance

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This study examines the effect of working capital efficiency on the performance of firms that experience cyberattacks. We find robust evidence that an aggressive working capital policy improves the immediate and after‐market stock returns as well as the operating performance of firms that suffer an outside party or a malware hacker attack. Specifically, we document a negative relationship between announcement period abnormal returns and the industry‐adjusted cash conversion cycle, implying that investors react less favorably when breached firms have more conservative working capital policies. We also find a negative association between the cash cycle and long‐horizon buy‐and‐hold abnormal returns indicating that working capital efficacy has a protracted positive effect on stock performance after an attack. The cash conversion cycle is also negatively related to operating performance, as measured by industry‐adjusted market power, industry‐adjusted return on assets, and industry‐adjusted market‐to‐book ratio. In addition, we find that access to trade credit and the ability to delay payments made to suppliers (depicted via days’ payables outstanding) are the most important factors in helping breached firms mitigate the financial and operating costs of cyberattacks. Overall, our results are robust to endogeneity concerns and expand the literature on the firm‐level aspects of data breaches.

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Is Cash-to-Cash Cycle Appropriate to Measure Supply Chain Performance?

Hong

2015

Toward Sustainable Operations of Supply Chain and Logistics Systems

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Cash Conversion Cycle and Firms’ Profitability – A Study of Listed Manufacturing Companies of Pakistan

Cited by 28 publications

References 21 publications

The Effects of Cash Conversion Cycle on Profitability: An Insight into the Agriculture and Food Industries in Thailand

The Effects of Cash Conversion Cycle on Profitability: An Insight into the Agriculture and Food Industries in Thailand

Cyberattacks, cash conversion cycle, and corporate performance

Is Cash-to-Cash Cycle Appropriate to Measure Supply Chain Performance?

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