Does working capital management affect the profitability of commercial banks: the case of Kosovo

Mazreku, Ibish; Morina, Fisnik; Zeqaj, Florentina

doi:10.14207/ejsd.2020.v9n1p126

Cited by 7 publications

(5 citation statements)

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“…PT Bukalapak.com Tbk in 2018 was included in the healthy category with a value of 4,901. But in 2019-2021 the company was in a state of bankruptcy where in 2019 the value dropped to 0.453 due to a decrease in working capital to assets (Mazreku et al, 2020) and a decrease in company profits. In 2020 the value dropped significantly to -3,611 due to a decrease in working capital in the company's assets and profits (NGUYEN et al, 2020;Pirttilä et al, 2020).…”

Section: Discussionmentioning

confidence: 99%

Potential Bankruptcy of Digital Companies in Indonesia: Analysis of Market Aspects and Financial Aspects Using Springate and Grover Methods

Aprilia¹,

Wulandari²,

Indries³

2023

EBASR

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Digital companies are companies that are growing very rapidly, but face many problems that can lead to bankruptcy. Therefore, bankruptcy prediction is an important topic that must be considered. If a company wants to survive and develop, it must pay attention to financial and market aspects. Therefore, in this survey, we selected six digital companies listed on the IDX between 2018 and 2021 as samples using the observation method. The analytical method used is Springate and Grover because it is considered good for knowing the financial distress of a company. This study aims to determine the condition of the company for the progress and sustainability of the company and help investors to determine investment. In addition, this study also aims to find out what method is right for predicting the financial distress of digital companies listed on the Indonesia Stock Exchange. Financial findings using the Springate approach show 3 companies in the bankrupt category, 1 potentially bankrupt and 2 healthy. Instead, according to Grover's method, 1 company is bankrupt and 5 are healthy. The accuracy rate for the Grover method is 83% with a low error rate of 17% so that it can be said that the Grover method is considered better for predicting bankruptcy. From a market perspective, all the companies in this study have excellent market potential. Companies must pay attention to financial and market aspects to avoid bankruptcy and develop better.

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Section: Discussionmentioning

confidence: 99%

Potential Bankruptcy of Digital Companies in Indonesia: Analysis of Market Aspects and Financial Aspects Using Springate and Grover Methods

Aprilia¹,

Wulandari²,

Indries³

2023

EBASR

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“…These include the effect of leverage (Agyei and Yeboah, 2011;Yeboah and Yeboah, 2014;Umoren and Udo, 2015) and credit risk (Agyei and Yeboah, 2011) on profitability. For example, in their study of banks in Kosovo, Mazreku, Morina and Zeqaj (2020) found a significant inverse relationship between leverage and return on assets. They attributed this to the fact that if banks continuously increased their debt financing, then the resultant increase in interest rates on deposits would trigger higher financing cost, which directly reduces profitability.…”

Section: Bank Size Growth Leverage and Credit Risk And Profitabilitymentioning

confidence: 98%

Working Capital Management and Profitability of Banks in Zambia

2023

RJFA

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The objective of this research was to assess how the management practices related to working capital impact the profitability of banks in Zambia. The primary research question guiding this study was: To what degree do the policies and practices regarding working capital management influence the profitability of banks in Zambia? In order to address this question, the study calculated the Return on Average Assets as a metric to measure bank profitability, which served as the dependent variable. Receivables collection period, payables payment period, and cash conversion cycle were adopted as predictor variables, while leverage, bank size, growth and credit risk were the control variables. Descriptive statistics, correlation analysis and fixed effects regression modelling using dummy variables were then used to analyse panel data for 14 commercial banks in the country for the period 2010 to 2021.Based on the findings, the study concluded that overall, effective management of working capital had a statistically significant positive impact on the profitability of banks in Zambia. With respect to individual working capital elements, it was observed that the period for collecting receivables and the duration of the cash conversion cycle had a negative and significant influence on bank profitability. Conversely, the period for making payments on payables had the opposite effect, positively impacting bank profitability.Additionally, the study discovered that when the receivables collection period and payables payment period were utilized instead of the cash conversion cycle in the regression analysis with return on average assets, there was a greater increase in R-square change and squared multiple partial R. This indicates that managing receivables and payables as distinct components of working capital is more advantageous for the banking sector in Zambia compared to employing the cash conversion cycle.

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“…Working capital management refers to the policies and decisions related to the management of current assets and current liabilities in the company .working capital consists of the company's investments in current assets ,which consist of Accounts Receivable , Cash and inventory , sometimes called Total working capital , simply to current assets used in operations. current assets are those that can be converted into cash within a short period of time less than a year, while current liabilities are those that are due for payment within less than a year (al-Zubaidi,2004) working capital can be simply defined as , It is the resources that a company has to carry out its daily activities (Mazreku et al,2020). The term working capital is also referred to , as the time horizon of a year or less for the management of current assets and current liabilities of the company (Hofmann&Kotzab,2010).…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of the Correlation Between Working Capital and the Value of the Company in the Environment of Iraqi Banks

Afloogee,

Sallal,

Hameed

2023

J. Professional Business Review

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Purpose: The research aims to measure the impact and correlation relationship between working capital and the value of the company in Iraqi banks. Theoretical framework: and the research shows a conceptual approach to working capital and its intended importance, policies and indicators. In addition, it reviews the value of the company and the factors affecting it, and the role of working capital on the value of the company. Design/methodology/approach: In order to achieve this, the authors selected a sample of the commercial banking sector listed on the Iraqi Stock Exchange, where four commercial banks were selected, namely (the Iraqi investment bank), (the Bank of Baghdad), (Kurdistan bank), (Ashur international investment bank) and for the years from (2016-2020) and according to their availability in the market to be the research sample. In order to measure the research variables, the authors used the model of the amount of change in working capital, to measure the variable of working capital, and the modified (Tobin's Q) model was used to measure the value of the company, in addition, the Pearson correlation coefficient was used, and the regression equation to measure the correlation and impact relationship. Findings: The results indicate the existence of a positive impact relationship with a significant significance between the working capital and the value of the company at a significant level of 0.05, as an increase in working capital and the value of the company at a significant level of 0.05 by one unit leads to an improvement of (0.602) , and the results also showed a significant impact relationship with a value of (T) of (13.251), and the regression coefficients with a value of (F) amounted to (103.224), and this contributed to the explanation of the amount of (0.240) of the permissible discrepancy between working capital and the company's value is at a significant level of( 0.05). Research, Practical & Social implications: The need to pay attention to current assets and current liabilities and invest optimally in them because they are an important element along with fixed assets and long-term liabilities in order to achieve high profitability ratios and then achieve optimal performance and try to maximize the wealth of the owners. Originality/value: The management of Iraqi banks should intensify interest in managing working capital in a good and scientific way, for the sake of the best expected performance, and it has to do with achieving better results, through paying attention to the careful analysis of the components of current assets, and the corresponding current liabilities, to achieve the required efficiency in managing capital The Worker.

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Does working capital management affect the profitability of commercial banks: the case of Kosovo

Cited by 7 publications

References 0 publications

Potential Bankruptcy of Digital Companies in Indonesia: Analysis of Market Aspects and Financial Aspects Using Springate and Grover Methods

Potential Bankruptcy of Digital Companies in Indonesia: Analysis of Market Aspects and Financial Aspects Using Springate and Grover Methods

Working Capital Management and Profitability of Banks in Zambia

The Impact of the Correlation Between Working Capital and the Value of the Company in the Environment of Iraqi Banks

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