Does Working Capital Management Affect Profitability of Belgian Firms

TL;DR: In this paper, the determinants of working capital requirements of thirty non-financial firms listed on the Nigerian Stock Exchange between 2004 and 2011 were examined and the outcome of this study supported the findings of some previous studies and is also consistent with financial theory.

TL;DR: In this paper, the authors investigate the effect of working capital management practices on profitability of SMEs listed on the Alternative Investment Market (AIM) from the perspective of financial directors.

Abstract: Optimal investment in working capital is vital to provide liquidity and enhance firm performance. This paper seeks to determine the quadratic relationship between working capital management (WCM) and firm performance. Also, this paper examines the effect of deviation from optimal WCM on firm performance. Therefore, the study uses a sample of 75 non-financial firms listed on the Nigerian Stock Exchange from 2007 to 2015. It adopts the cash conversion cycle component of working capital management to evaluate the quadratic assumption using panel regression. The empirical results from the sample of the study indicate that the relationship between working capital management and firm performance is quadratic. This study also found that an optimal level exits at which investments in working capital will yield the maximum return. This study concludes that deviation from the optimal level of investments in WCM (either above or below) affects the performance of firms. The study, therefore, recommends that firms should promote best practices for maintaining optimal working capital investment level to enhance their performance and sustain growth. Corresponding author: Sunday Simon Email address for corresponding author: simonsunday016@gmail.com First submission received: 10th April 2017 Revised submission received: 23rd May 2017 Accepted: 26th June 2017

TL;DR: In this paper, the authors examined the working capital management of Ghanaian banks on profitability during the period 2005-2010 using panel regression models and found that leverage of the banks exhibit statistically significantly a positive impact on banks' profitability.

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.

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.

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.

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.