Optimal Working Capital Solutions for Companies in the Field of Environment

Abstract

The study aims to analyze the impact of working capital management on the profitability of companies in the environmental sector in Vietnam. The study sample was 68 companies doing business in the environmental sector, corresponding to 628 observations from 2010 to 2021. Using the Tobit regression model, the author identified the significant effect of the average collection period and average payment period on the profitability of companies. Based on the study, the author offers some discussions and assessments about the critical role of shortening the cash conversion cycle, shortening the receivables period, and financial solution recommendations to improve profitability for companies in the environmental sector in Vietnam.