The effect of working capital management on profitability: Evidence from southeast Europe

Vuković, Bojana; Jakšić, Dejan

doi:10.5937/ekopolj1901159v

Cited by 16 publications

(20 citation statements)

References 9 publications

(7 reference statements)

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“…Interestingly, leverage of firms had a negative effect on the financial performance of the companies. This implies the level of gearing of the companies as a control variable has a negative impact on the financial performance and this is in line with the findings of Vuković and Jakšić (2019).…”

Section: Discussion Of Findingssupporting

confidence: 87%

“…The results of this study showed that working capital management has a significant effect on the profitability of the selected banks and that return on asset is a better measure for bank profitability. Vuković and Jakšić (2019), conducted a research on the effect of working capital management on company's profitability. The research design adopted for this work was panel design while the sample of the study included 9883 active companies in food industry in Southeast Europe.…”

Section: Studies That Confirm the Cash Conversion Cycle Theorymentioning

confidence: 99%

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Working capital management and financial performance of non financial quoted companies in Nigeria

Ibrahim

Isiaka²

2021

IJRBS

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This study examines the effect of working capital management on the financial performance of Non-financial companies quoted on the Nigerian Stock Exchange over the period 2014 – 2018 while using a panel research design. This work is unique because it considers a sample of 71 companies drawn from all the 10 non-financial sectors of the NSE. Unlike most extant studies, financial performance was captured by earnings per share as a proxy, while the right-hand side variable being working capital management was denominated by Accounts receivable period, Inventory turnover period, and Accounts payable period. This study also considered the effect of some control variables namely annual capital expenditure, age of firm, GDP, firm size, growth of the company, and firm leverage on EPS. Data were retrieved from the Nigerian Stock Exchange 2019 Factbook. The model estimation technique adopted was the Pooled Ordinary Least Squares, fixed effect, and random-effect methods. Results from this study are consistent with the theoretical position that all aspects of working capital management have a significant effect on financial performance. While ITP and ACP were negatively related to EPS, APP was found to have a positive relationship with EPS. The research results also reveal that although all the control variables were found to be significant, only the age of the firm was deemed to be positively related to EPS. Based on the findings, the research recommends that firms should focus their managerial attention on lowering their ITP and ACP while increasing their APP, as results indicate that management of these elements of working capital can translate into liquidity and higher profitability.

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Section: Discussion Of Findingssupporting

confidence: 87%

Section: Studies That Confirm the Cash Conversion Cycle Theorymentioning

confidence: 99%

Working capital management and financial performance of non financial quoted companies in Nigeria

Ibrahim

Isiaka²

2021

IJRBS

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“…The rapid rise in wages in the food industry has been identified as a factor affecting labour productivity, which may result in a decline in competitiveness. However, profitability is also affected by the management of working capital, as Vukovic, Andric, & Jaksic (2017) confirmed in their research. They examined the impacts of chosen factors on the ROA profitability indicator.…”

Section: Literature Reviewmentioning

confidence: 57%

Breaking food safety and quality standards in the EU: Financial aspects within poultry products manufacturers in Visegrad 4 countries

Komínková¹,

Vavřina²,

Polák³

2020

Journal of International Studies

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Under changing consumer preferences towards the need to increase qualitative side of food consumption,the level of meeting EU food safety and quality standards can be discussed as a specific factor of competitiveness for food manufacturers. The EU member countries use an information exchange instrument named Rapid Alert System for Food and Feed (RASSF) for sharing information with both public authorities and consumers. An increasing number of food safety and quality problems was observed in the year 2019 regarding the industry branch EU NACE 1012-poultry meat and poultry meat products in CEEC countries. This paper aims at the identification of common factors in the financial performance of businesses active in the industry mentioned above within Visegrad 4 member countries focusing on a specific distinctive period between 2009 and 2017. The authors employ factorial analysis of variance approach together with a post hoc Scheffé test for revealing similarities/dissimilarities within the selected key financial performance indicators for the sample of poultry meat and poultry meat products manufacturers. Namely, factors to be researched are country of business entities´ settlement, economic size and time proxy variable element of the

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“…These relationships between the WCM and profitability are often influenced, specifically, by the level of financial leverage (Dalci and Ozyapici 2018), reverse factoring approaches (Damianos Lekkakos and Serrano 2016), reinvestment in the firms (Heryan 2020), inventories, receivables and payables management (Lyngstadaas and Berg 2016), and macroeconomic indicators (Simon et al 2019). The variables considered to represent the WCM and profitability have their implications in the respective interrelationships (Vukovic et al 2017). On the other hand, WCM practices are different around the world, between sectors and firm sizes.…”

Section: Working Capital Management Policiesmentioning

confidence: 99%

Bibliometric Analysis for Working Capital: Identifying Gaps, Co-Authorships and Insights from a Literature Survey

Martinho

2021

IJFS

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From a financial perspective, working capital represents the liquidity of firms that makes them able to deal with short-term liabilities in current assets (inventories, receivables accounts, and net financial resources). However, this concept is also considered in scientific literature as, among other meanings, stock of productive capital, or variables costs. Considering the importance of working capital in a firms’ dynamics, the principal objective of this study is to highlight the main gaps and insights in literature concerning working capital and to suggest future research. For this purpose, bibliometric analysis was carried out through bibliographic information from both the Web of Science Core Collection and from the Scopus for the topic of “working capital”. These data were first worked through bibliometric approaches, considering the VOSviewer and Gephi software and later surveyed through a literature review. As the main insights, it is worth highlighting that there are several gaps in related literature, where the most worrying is the weak reference to sustainability or sustainable development concepts. Finally, the majority of the networked research was focused on just a few authors, organizations, and countries.

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The effect of working capital management on profitability: Evidence from southeast Europe

Cited by 16 publications

References 9 publications

Working capital management and financial performance of non financial quoted companies in Nigeria

Working capital management and financial performance of non financial quoted companies in Nigeria

Breaking food safety and quality standards in the EU: Financial aspects within poultry products manufacturers in Visegrad 4 countries

Bibliometric Analysis for Working Capital: Identifying Gaps, Co-Authorships and Insights from a Literature Survey

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