This study examines the impact of operating capital management (WCM) strategies on the monetary execution of small and medium-sized enterprises (SMEs) in Poland, with a particular focus on finding ...the correct equalization between liquidity and benefit. The review utilizes relapse investigation to survey the effect of forceful and conservative (WCM) techniques on the benefit and fluidity of 4,891 Polish SMEs from 2012 to 2021, as measured by an informational index of budgetary and operational information. The results demonstrate a noteworthy connection between WCM improvements and budgetary results. However, aggressive actions do not just mean higher earnings; they also involve heavier financial risks. On the other hand, cautious methods are linked with stronger financial stability but may lead to lower profit. According to the survey, when cash conversion cycle (CCC) days fall by 1%, return on total assets (ROA) can increase by approximately 1:0 percentage points. This demonstrates again that WCM is very important in improving company profits. These findings have implications for academics, practitioners, and government officials.
This study examines the relationship between companies’ cash cycle and profitability ratios. For this purpose, 30 companies traded in Borsa Istanbul with the highest net profit were selected, and the ...data obtained were subjected to panel data analysis. In the study, statistically significant, positive and negative relationships were found between the explanatory variables and the dependent variables of ROA and ROE. There are statistically significant and negative relationships between the explanatory variables of CCC, leverage and the dependent variable of ROA, as expected. Asset turnover ratio and firm size positively and significantly affect the ROA. Asset turnover positively and significantly affects the return on equity. The short-term debt repayment period is statistically effect the return on assets but the other factors used in calculating the CCC do not have any effect.
Profitabilitas menjadi indikator dalam pengembangan perusahaan dengan perolehan pendapatan dalam mengelola operasi perusahaan. Perusahaan berupaya mempertahankan dan meningkatkan profitabilitas untuk ...mengukur kinerja perusahaan dengan meningkatkan efisiensi manajemen modal kerjanya. Penelitian ini menyelidiki pengaruh manajemen modal kerja melalui cash conversion cycle dan growth opportunity melalui sales growth terhadap profitabilitas perusahaan. Penelitian ini dilakukan pada 91 perusahaan sektor industri barang konsumsi di Indonesia dari tahun 2015 hingga 2020. Pengujian hipotesis dari 489 data dilakukan dengan analisis regresi data panel dengan model random effect. Hasil penelitian menunjukkan bahwa CCC dan growth opportunity tidak berpengaruh signifikan terhadap profitabilitas. Temuan ini menunjukkan bahwa perusahaan sektor barang konsumsi perlu melakukan pertimbangan mengenai pengelolaan manajemen modal kerja yang menjadi bagian dalam operasional perusahaan secara efisien, sehingga perusahaan dapat memaksimalkan keuntungan perusahaan.
This study empirically examines how benefits of resource dependence may be bargained away by supply chain finance (SCF) costs incurred to upstream suppliers and downstream buyers through cash ...conversion cycles. We found that a focal firm may get compensated for its resource contribution with an extra share of the financial gains by using the superior bargaining position over its supply chain partners. Nevertheless, the focal firm may proactively restrain its use of bargaining power when the need for cooperative relationship with its supply chain partners prevails. Managerial and research implications for the introduction of power theory and relation theory to the SCF studies are discussed.
•We examine how benefits of resource dependence may be bargained away by supply chain finance costs through cash cycles.•A focal firm may obtain an extra share of the financial gains by using its superior bargaining position over its partners.•A focal firm may proactively restrain its use of bargaining power when there are needs for cooperative relationship.
This study investigates the effect of CEO narcissism on firm's cash conversion cycle (CCC), and how this influence is moderated by CEO gender. Based on a sample of 354 CEOs in 229 S&P 500 firms, our ...results indicate that firms led by more narcissistic CEOs tend to have a shorter CCC and this effect is weaker in companies led by a female CEO. Our additional analyses show that the effect of CEO narcissism on the CCC may improve or damage firm performance depending on the firm's CCC level.
Efficient working capital management is becoming important for restaurant firms coping with weak financial conditions and increased economic uncertainty. This study investigates the impact of ...restaurant firms’ working capital on their profitability. We further examine the effects of firms’ cash levels on the relationship between working capital and profitability. The findings ascertain a strong inverted U-shape relationship between working capital and a firm's profitability, which indicates the existence of an optimal working capital level for restaurant firms. This study also reveals that a firm's cash level is an important factor for efficient working capital management. The results suggest that interactive effects exist among working capital, cash levels, and profitability. Thus, restaurant managers should consider these different roles and impacts when developing an efficient working capital management strategy. Detailed results and implications are presented in the main body of this paper.
This paper studies the association of managerial ability (MA) with efficiency in working-capital management (WCM) of firms. Using a large sample of 1,14,173 firm-year observations between 1988 and 2018 ...in the US, we show a negative contemporaneous relationship between MA and efficiency of WCM, indicating that more able managers manifest higher WCM efficiency and thereby affect firm performance positively through a mediating channel of WCM. Further, we show that this association is non-linear in nature with managers focusing more on long-term value-enhancing projects for the firm beyond a threshold MA level, having already attained the optimal efficiency in WCM. The results remain robust after a series of robustness tests.
The study investigates the relationship between corporate attributes and the probability of bankruptcy of halal food and beverage companies in five countries: Indonesia, Malaysia, Pakistan, Saudi ...Arabia and the United Arab Emirates (UAE). Using a sample of 56 firms from 2008 to 2021, we find the working capital period (cash conversion cycle), leverage and firm growth to increase the probability of these companies becoming bankrupt. In contrast, liquidity, profitability and firm size reduce the likelihood of these firms being declared bankrupt. The findings reveal essential firm attributes that should be helpful to the management of halal food and beverage firms, relevant regulators and potential investors toward ensuring the firms’ sustainable operations.
•Firms with a higher ESG score operate with lower working capital requirements and a shorter cash conversion cycle.•The governance pillar does not influence working capital requirements.•Firms with a ...higher ESG score have a lesser need for cash than the industry average.
This study provides evidence on the relationship between working capital management (WCM) and firms’ sustainability level covering 1,394 US publicly-listed firms in the period 2002-2020. We find that firms with higher ESG scores operate with lower working capital requirements and a shorter cash conversion cycle, although the effect comes entirely from the environmental and social pillars. The inconclusive result for the governance pillar reinforces the role of sustainability on WCM. Outperforming firms in sustainability scores have a lesser need for cash than the industry average. Overall, our findings highlight that WCM optimization may be attained following investment in firms’ sustainability.
