The impact of working capital management on firm profitability in different business cycles: Evidence from Finland

Enqvist, Julius; Graham, Michael; Nikkinen, Jussi

doi:10.1016/j.ribaf.2014.03.005

Cited by 246 publications

(209 citation statements)

References 21 publications

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“…Those results contradict classical risk theory but are in line with several previous empirical studies (e.g. Gschwandtner, 2005;Enqvist et al, 2014;Pattitoni et al, 2014). The negative effect of financial risk can be explained by the risk-return paradox which states that good management practices can increase ROA and at the same time reduce financial risk (Bowman, 1980).…”

supporting

confidence: 86%

What drives firm profitability? A multilevel approach to the Spanish agri-food sector

Zouaghi¹,

Sánchez

Hirsch

2017

Span. j. agric. res.

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Strategic management research has demonstrated the importance of firm-and industry structure as drivers of firm profitability. However, less is known about how firms´ geographical locations affect profitability. Applying a multi-level approach of hierarchical linear modeling we estimated firm-, industry-, and region-specific effects on profitability of 3,273 agri-food firms operating in different Spanish districts over the time span 2006-2013. The results reveal the dominance of firm-specific effects which contribute up to 48.8% to variance in firm profitability while the contribution of industry effects (0.8-4.2%), geographical location (0.1-1.8%), and year effects (0.1-2.5%) is rather small. Moreover, firm size, risk, and innovative activity turn out as significant profit drivers at the firm level. Although firm-effects outweigh industry-and region-specific factors, the results indicate that industry concentration as well as regional education and unemployment influence profitability. In addition, proximity to technological institutes as well as the degree of urbanization of the region in which a firm operates can be drivers of profitability. Hence, despite the superiority of firm effects the results indicate that agri-food managers should also consider possible advantages from location-based resources in order to ensure competitiveness.Additional keywords: agri-food profits; firm-, industry-, and location effects; hierarchical linear model.

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supporting

confidence: 86%

What drives firm profitability? A multilevel approach to the Spanish agri-food sector

Zouaghi¹,

Sánchez

Hirsch

2017

Span. j. agric. res.

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“…As argued by [15] if the level of ARP increases, then the sales of the company also increase. Further, high ARPs serve as quality guarantee hence giving the clients a more sustained relationship in terms of quality thus improving the company performance.…”

Section: Accounts Receivable Periodmentioning

confidence: 94%

“…ing capital management and SME performance by [2] and [15], the following variables ought to be controlled; Company age, assets tangibility, financial leverage, liquidity ratio and short-term financing.…”

Section: Sshe 2016mentioning

confidence: 99%

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Trends in working capital management and its impact on firms’ performance – An analysis of SMEs

Xiao-ting¹,

Chen²,

Yu³

2017

Research on Modern Higher Education

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This paper aims to explore the relationship between the performance of small and medium enterprises (SMEs) and working capital management. To make the research robust, accounting performance and measures of market related performance have been used to gauge the SMEs performance. This research utilizes secondary data obtained from the Alternative Investment Market concerning SMEs listed in the London Stock Exchange, to investigate the significance of working capital management towards the performance of SMEs. The working capital management components that were used in research are; account payable period APP, average collection period (ACP), return on assets (ROA) and inventory holding period (IHP). The analysis of data involved the use of regression analysis and extensive use of correlation analysis in order to establish the relationship between working capital management and SME performance. The study established that the use of WCM components such as cash conversion cycle, return on assets, cash conversion cycle and inventory holding period have a significant impact on the performance of SMEs. Further, it was established that when SMEs invested heavily in inventories and receivables, they amassed low profits while investment in current assets in relation to total assets lead to elevated profitability. Hence, it was concluded that there is a compelling relationship between WCM and SME performance.

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“…The developed structure of innovative potential is presented in Table 1, which includes all six evaluation potentials, consisting of each of a set of three most important for the purposes of assessing innovative development of parameters [2]. The weight characteristic of the significance of each potential is in the range from 0 to 1.…”

Section: Methodsmentioning

confidence: 99%

Formation of tools for assessing the level of innovative development of an enterprise

et al. 2018

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Abstract. The purpose of the study is to develop tools for assessing the level of innovative development of an enterprise in order to improve the management of its innovation activities. Radical increase of the role of innovations in modern conditions predetermines the activation of innovative activity of enterprises on the basis of increasing production efficiency, implementing promising research and development projects and implementing innovative programs. The situation in the world economy demonstrates that the innovative component of enterprise development is the main source of growth and contributes to the level of competitiveness of the organization. As a result of the generalization of the experience of research in the field of innovative development, a system of economic indicators that maximally characterizes the innovation activity carried out by enterprises is formed, which is the basis for developing tools for assessing the level of innovation development of the enterprise, a toolkit for assessing the level of innovative development of an enterprise using the proposed system of economic indicators, to increase the level of innovative development of the enterprise tions and to assess their cost-effectiveness.

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The impact of working capital management on firm profitability in different business cycles: Evidence from Finland

Cited by 246 publications

References 21 publications

What drives firm profitability? A multilevel approach to the Spanish agri-food sector

What drives firm profitability? A multilevel approach to the Spanish agri-food sector

Trends in working capital management and its impact on firms’ performance – An analysis of SMEs

Formation of tools for assessing the level of innovative development of an enterprise

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