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 |
| _version_ | 1811335821332054016 |
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| author | Nguyen Thi Thanh Phuong Dang Ngoc Hung |
| author_facet | Nguyen Thi Thanh Phuong Dang Ngoc Hung |
| author_sort | Nguyen Thi Thanh Phuong |
| collection | DOAJ |
| description | 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. |
| first_indexed | 2024-04-13T17:30:41Z |
| format | Article |
| id | doaj.art-7f754a308678402fb4923cc599bac281 |
| institution | Directory Open Access Journal |
| issn | 2369-7393 2369-7407 |
| language | English |
| last_indexed | 2024-04-13T17:30:41Z |
| publishDate | 2020-03-01 |
| publisher | Growing Science |
| record_format | Article |
| series | Accounting |
| spelling | doaj.art-7f754a308678402fb4923cc599bac2812022-12-22T02:37:35ZengGrowing ScienceAccounting2369-73932369-74072020-03-016325926610.5267/j.ac.2020.3.001Impact of working capital management on firm profitability: Empirical study in VietnamNguyen Thi Thanh PhuongDang Ngoc HungThis 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.http://www.growingscience.com/ac/Vol6/ac_2020_14.pdfworking capital managementdays of inventory on handdays of sales outstandingaverage payment periodcash conversion cycleprofitability |
| spellingShingle | Nguyen Thi Thanh Phuong Dang Ngoc Hung Impact of working capital management on firm profitability: Empirical study in Vietnam Accounting working capital management days of inventory on hand days of sales outstanding average payment period cash conversion cycle profitability |
| title | Impact of working capital management on firm profitability: Empirical study in Vietnam |
| title_full | Impact of working capital management on firm profitability: Empirical study in Vietnam |
| title_fullStr | Impact of working capital management on firm profitability: Empirical study in Vietnam |
| title_full_unstemmed | Impact of working capital management on firm profitability: Empirical study in Vietnam |
| title_short | Impact of working capital management on firm profitability: Empirical study in Vietnam |
| title_sort | impact of working capital management on firm profitability empirical study in vietnam |
| topic | working capital management days of inventory on hand days of sales outstanding average payment period cash conversion cycle profitability |
| url | http://www.growingscience.com/ac/Vol6/ac_2020_14.pdf |
| work_keys_str_mv | AT nguyenthithanhphuong impactofworkingcapitalmanagementonfirmprofitabilityempiricalstudyinvietnam AT dangngochung impactofworkingcapitalmanagementonfirmprofitabilityempiricalstudyinvietnam |