Journal Article10.1111/1468-5957.00008
Does working capital management affect profitability of Belgian firms
TL;DR: In this article, the relation between working capital management and corporate profitablity is investigated for a sample of 1,009 large Belgian non-financial firms for the 1992-1996 period.
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Abstract: The relation between working capital management and corporate profitablity is investigated for a sample of 1,009 large Belgian non-financial firms for the 1992-1996 period. Trade credit policy and inventory policy are measured by number of days accounts receivable, accounts payable and inventories, and the cash conversion cycle is used as a comprehensice measure of working capital management. The results suggest that managers can increase corporate profitablity by reducing the number of days accounts receivable and inventories. Less profitable firms wait longer to pay their bills.
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Citations
Effects of Working Capital Management on SME Profitability
TL;DR: In this article, the authors provide empirical evidence about the effects of working capital management on the profitability of a sample of small and medium-sized Spanish firms and demonstrate that managers can create value by reducing their firm's number of days accounts receivable and inventories.
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Effects of working capital management on SME profitability
TL;DR: In this paper, the authors provide empirical evidence on the effects of working capital management on the profitability of a sample of small and medium-sized Spanish firms and demonstrate that managers can create value by reducing their inventories and the number of days for which their accounts are outstanding.
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Trends in working capital management and its impact on firms, performance: an analysis of mauritian small manufacturing firms
Kesseven Padachi
- 01 Jan 2006
TL;DR: In this paper, the authors examined the trends in working capital management and its impact on firms' performance and found that high investment in inventories and receivables is associated with lower profitability.
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•Journal Article
The Relationship Between Working Capital Management And Profitability: Evidence From The United States
TL;DR: In this paper, the authors extend Lazaridis and Tryfonidis's findings regarding the relationship between working capital management and profitability and find statistically significant relationship between the cash conversion cycle and profitability, measured through gross operating profit.
Working capital management, corporate performance, and financial constraints
TL;DR: In this article, the authors examined the linkage between working capital management and corporate performance for a sample of non-financial UK companies and provided strong support for an inverted U-shaped relation between investment in working capital and firm performance.
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•Posted Content
Trade credit, financial intermediary development, and industry growth
Raymond Fisman,Inessa Love +1 more
TL;DR: The authors showed that in countries with relatively weak financial institutions, industries with greater dependence on trade credit financing (measured by the ratio of accounts payable to total assets) grow faster than industries that rely less on such credit.
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An economic model of trade credit
TL;DR: In this article, the authors identify two reasons for credit sales: the first we might call a financing motive, and the second a transactions motive and conclude that to a large extent the aggregate stock of trade credit is explained by the transactions motive.
650
A Pure Financial Explanation for Trade Credit
TL;DR: In this article, the authors provided a pure financial explanation for the existence of trade credit and for the values of the credit terms offered to customers, and examined the pure financial incentive to lend this liquid reserve to customers by viewing a market borrowing rate that exceeds the market lending rate of interest as a hindrance to trade.
477
Efficiency of working capital and corporate profitability
Hyun-Han Shin,H L Soenen +1 more
- 01 Jan 1998
386
Trade Credit, Product Quality, and Intragroup Trade: Some European Evidence
Marc Deloof,Marc Jegers +1 more
TL;DR: In this article, Deloof et al. applied a similar methodology not only using a sample of industrial firms, but also a sample sample of Belgian wholesale distribution firms, and found evidence that a firm selling to a linked customer extends trade credit for reasons other than assessing product quality.
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