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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
Determinants of Portuguese firms’ financial performance: panel data evidence
TL;DR: In this paper, the authors used data from 37 non-financial firms in the period between 2010 and 2015 to analyse the determinants of Portuguese firms' performance, showing that internal, external and institutional factors are important to explain the performance of firms listed in Euronext Lisbon.
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The Effect of Working Capital Management on Profitability
TL;DR: In this article, the effect of working capital management on company profitability was examined using Pearson's correlation and regression analysis (Ordinary Least Square) for a period of ten years (2002-2012).
The nexus between firm size, growth and profitability: new panel data evidence from Asia–Pacific markets
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Cash Holdings, Working Capital and Firm Value: Evidence from France
Ruta Autukaite,Eric Molay +1 more
TL;DR: In this article, the importance of short-term financial decisions to a company's value is considered by testing whether an extra euro invested in cash or in net working capital is valued at less than one euro.
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•Journal Article
Evaluating the Impact of Working Capital Management Components on Corporate Profitability: Evidence from Indian Manufacturing Firms
TL;DR: In this paper, the authors investigated the relationship between working capital management components and the profitability of a sample of Indian manufacturing firms using a period of 14 years from 1996-97 to 2009-10 and found an insignificant negative relationship between firm size and its net operating profit ratio.
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References
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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.
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