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Does Working Capital Management Affect Profitability of Belgian Firms
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TL;DR: In this paper, the relation between working capital management and corporate profitability is investigated for a sample of 1009 large Belgian non-financial firms for the 1992-1996 period, and the results suggest that managers can increase corporate profitability by reducing the number of days accounts receivable and inventories.
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Abstract: The relation between working capital management and corporate profitability is investigated for a sample of 1009 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 comprehensive measure of working capital management. The results suggest that managers can increase corporate profitability by reducing the number of days accounts receivable and inventories. Less profitable firms wait longer to pay their bills.
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Citations
Factors Affecting Automation of Inventory Management in Micro, Small and Medium Enterprises: A Case Study of Kitui County
TL;DR: In this article, the authors assess factors affecting the automation of inventory management in micro, small and medium enterprises in Kenya and find out that financial accessibility is an obstacle in financing automation of inventories.
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An Empirical Study of Association between Working Capital Management and Performance: Evidence from Tehran Stock Exchange
TL;DR: In this article, the effect of different variables of working capital management including the average collection period, inventory turnover in days, average payment period and Cash conversion cycle on the financial performance of Iranian firms was investigated.
Providing a New Model for Assessment of Working Capital Management:Evidence from Tehran Stock Exchange
TL;DR: In this paper, the relationship of working capital management with profitability-based indicators at the hand of a new model is explained. But the results do not confirm significant inverse U-shape relationship of Cash Conversion Cycle (CCC) and Net Working Capital to Total Assets (NWC/TA) as indicators (predictors) of WCM with Return on Assets (ROA), but do indicate a significant inverse relationship of current ratio and quick ratio with ROA.
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Working capital management and profitability: Evidence from Cement sector of Pakistan, listed on Karachi stock exchange
Hasnain Manzoor
- 01 Jan 2013
TL;DR: In this paper, the authors explored the relationship of profitability and working capital in the cement industry of Pakistan and found negative significant relationship between the account receivable days, stock days and firm's size with profitability.
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•Dissertation
Effects of Working Capital Management on the Performance of Small and Medium Enterprises in Nigeria
Haruna Alhaji Mshelia
- 09 Jan 2017
TL;DR: In this paper, the authors propose a novel approach to solve the problem of homonymity in the context of homophily, and propose an approach based on the concept of homomorphism.
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References
•Posted Content
Law and Finance
Rafael La Porta,Rafael La Porta,Florencio Lopez de Silanes,Florencio Lopez de Silanes,Andrei Shleifer,Andrei Shleifer,Robert W. Vishny,Robert W. Vishny +7 more
TL;DR: This paper examined legal rules covering protection of corporate shareholders and creditors, the origin of these rules, and the quality of their enforcement in 49 countries and found that common law countries generally have the best, and French civil law countries the worst, legal protections of investors.
16.2K
Legal Determinants of External Finance
TL;DR: The authors showed that countries with poorer investor protections, measured by both the character of legal rules and the quality of law enforcement, have smaller and narrower capital markets than those with stronger investor protections.
•Posted Content
Trade Credit: Theories and Evidence
Mitchell A. Petersen,Mitchell A. Petersen,Raghuram G. Rajan,Raghuram G. Rajan,Raghuram G. Rajan +4 more
TL;DR: In this article, the authors focus on a sample of small firms whose access to capital markets may be limited and find evidence that firms use trade credit relatively more when credit from financial institutions is not available.
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Trade credit, quality guarantees, and product marketability
TL;DR: In this paper, the authors consider trade credit as a way that firms can guarantee product quality, rather than as a means of financing less creditworthy firms, and seek, and provide, possible explanations for observed phenomena such as relatively shorter (or no) trade credit terms for consumer and food products and relatively longer terms for heavy industrial equipment.
794
•Posted Content
Trade Credit, Financial Intermediary Development and Industry Growth
TL;DR: In this paper, Fisman and Love show 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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