Impact of working capital management on firm profitability: Empirical study in Vietnam
This article studies the impact of working capital management (WCM) on firm profitability (FP) in Vietnam. The study uses the Generalized Least Squares (GLS) regression method using a sample of 5,295 firms (observations) listed on stock market in Vietnam from 2009 to 2018. First, the study found tha...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Growing Science
2020-03-01
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| Series: | Accounting |
| Subjects: | |
| Online Access: | http://www.growingscience.com/ac/Vol6/ac_2020_14.pdf |
| Summary: | This article studies the impact of working capital management (WCM) on firm profitability (FP) in Vietnam. The study uses the Generalized Least Squares (GLS) regression method using a sample of 5,295 firms (observations) listed on stock market in Vietnam from 2009 to 2018. First, the study found that inventory turnover, average receivables (AR), average payment (AP), cash conversion cycle (CCC) had negative impacts on the firm profitability (FP). However, when we continued using quadratic function, we found that INV, AR, AP and CCC had a non-linear relationship (the U-curve) with FP. These research results contribute managerial contributions for firms in efficiently using capital when considering its investment policy. |
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| ISSN: | 2369-7393 2369-7407 |