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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
The Effect of Working Capital Management on Corporate Profitability: Evidence from Nigerian Food Product Firms
Sabo Muhammad,Rabi’U Saminu Jibril,Usman Sani K. Wambai,Fatima Bello Ibrahim,Tjjani Habibu Ahmad +4 more
- 26 May 2015
TL;DR: In this paper, the impact of working capital management on corporate profitability through the periods of 2008 to 2012 was examined by means of descriptive statistics and GLS regression analysis using STATA 11, which showed a positive relationship among Average Collection Period (ACP), Current Ratio (CR), and the size of the firm (LOGSIZE) with profitability and a negative relationship with Inventory Turnover Period (ITP), Average Payment Period (APP) and the number of employees.
•Posted Content
Working Capital Management: An Exploratory Study
TL;DR: In this article, the authors explain the fundamentals of working capital management, the importance of its interaction with financial markets, and how this interaction might explain working capital patterns around the world.
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Trade credit dynamics during the phases of the business cycle – a value chain perspective
TL;DR: In this article, the authors provide evidence of how the business cycle affects net-trade-credit and its components in firms on different tiers of the value chain, including retail, wholesale and two consecutive manufacturing tiers.
24
•Journal Article
Cash Conversion Cycle and its Impact upon Firm Performance: an Evidence from Cement Industry of Pakistan
TL;DR: Uyar et al. as mentioned in this paper defined the cash conversion cycle as a measure related with the management of account receivables, management of inventory, and management of accounts payables.
23
•Dissertation
Determinants of capital structure in small and medium sized enterprises in Malaysia
Hafizah Mat Nawi
- 01 Jan 2015
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.
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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
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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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