Efficient working capital management as the tool for driving profitability and liquidity: a correlation analysis of Nigerian companies

Adekola, Ambrose; Samy, Martin; Knight, Dave

doi:10.1504/ijbg.2017.10001688

Cited by 5 publications

(1 citation statement)

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“…Working capital management consists of all management decisions related to all current assets and current debt through the determination of optimal amount of cash, receivables, securities, inventory and current liabilities, as well as relationship between current assets and current debt [6,7]. Working capital management is related to the decisions regarding the composition of current assets and current debt that can increase company profitability [2,5]. The four components in working capital management which are funded by current liabilities are interrelated and are an inseparable unit.…”

Section: Working Capital Management As An Interrelated Systemmentioning

confidence: 99%

Integrated Corporate Governance Model Innovation for Working Capital Management

Mutamimah¹,

Harjito²

2020

Proceedings of the 3rd Asia Pacific International Conference of Management and Business Science (AICMBS 2019)

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Working capital management is a short-term investment decision funded by current liabilities consisting of interrelated components, namely: cash, receivables, securities and inventories, that have different agency relationships yet interrelated. Until recently corporate governance was not integrated, so it was not effective in increasing companies' liquidity and profitability. The purpose of this study is to develop an integrated corporate governance framework model innovation for working capital management. This research was conducted by reviewing articles related to corporate governance and working capital management, finding gaps among them, and identifying their limitations. The results show that the integrated corporate governance model innovation for working capital management is able to determine the composition of optimal working capital so as to increase liquidity, profitability, and reduce business risk. This research, theoretically, develops agency theory and good corporate governance model in managing working capital and, practically, provides information for managers and investors in short term investment decisions and financing decisions.

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Section: Working Capital Management As An Interrelated Systemmentioning

confidence: 99%

Integrated Corporate Governance Model Innovation for Working Capital Management

Mutamimah¹,

Harjito²

2020

Proceedings of the 3rd Asia Pacific International Conference of Management and Business Science (AICMBS 2019)

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Working capital management and firm profitability: evidence from emerging markets

Orazalin

2019

IJBG

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Does Working Capital Management Affect Profitability? Empirical Evidence from Indonesia Listed Firms

Basyith

Djazuli

Fauzi

2021

Asian Economic and Financial Review

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This study attempts to examine the impact of working capital management (WCM) on profitability and examine the working capital conditions of several companies listed on the Indonesia Stock Exchange (IDX). The sample used is 135 listed firms and were selected from each sector, such as plantation, pharmaceutical, telecommunication, investment, retail, and the cement and metal industries from 2000 to 2019. The variables employed in this study are working capital investment strategy (WCIS), working capital financing strategy (WCFS), cash conversion cycle (CCC), days sales outstanding (DSO), days inventory outstanding (DIO), days payable outstanding (DPO), debt ratio (DR), size, age, and current ratio (CR). The ordinary least squares (OLS) was employed to analyze the data. The results revealed that the working capital investment approach has a positive and significant effect on return on assets (ROA) in all regression models used; the working capital financing approach has a negative effect on ROA but not significant; the working capital investment approach to the gross profit margin in all models shows a negative and significant coefficient; and the working capital financing approach shows a negative and significant sign for all capital used. Based on the type of industry, companies that use a lot of aggressive working capital investment approaches are the agriculture industry and the infrastructure, utility and transportation industries. Meanwhile, companies that mostly take a conservative working capital investment approach are the consumer goods industry, the basic chemical industry and the miscellaneous industry. Contribution/Originality: This study is one of very few studies that have investigated working capital management on profitability and also examines the working capital conditions of several companies on the Indonesia Stock Exchange (IDX) using considerable and diverse firms as the sample. tenure of current liabilities and choose the right kind of debt that matches the tenure of a firm's assets. Working capital is required for a firm to carry out its daily operations. Working capital is the overall value of a firm's current assets, which are also referred to as gross working capital, and consist of cash, receivables, inventory Asian Economic and Financial Review

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Efficient working capital management as the tool for driving profitability and liquidity: a correlation analysis of Nigerian companies

Cited by 5 publications

References 0 publications

Integrated Corporate Governance Model Innovation for Working Capital Management

Integrated Corporate Governance Model Innovation for Working Capital Management

Working capital management and firm profitability: evidence from emerging markets

Does Working Capital Management Affect Profitability? Empirical Evidence from Indonesia Listed Firms

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