The effect of working capital management and credit management policy on Jordanian banks’ financial performance
This study investigated the impact of Working Capital Management (WCM) and Credit Management Policy (CMP) on the Financial Performance (FP) of Jordanian banks (JB). The study data were obtained from 16 Jordanian banks listed on the Amman Stock Exchange (ASE) between 2017 and 2020. The study used pan...
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| Format: | Article |
| Language: | English |
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LLC "CPC "Business Perspectives"
2022-01-01
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| Series: | Banks and Bank Systems |
| Subjects: | |
| Online Access: | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/16040/BBS_2021_04_AL-Zararee.pdf |
| _version_ | 1818510169055690752 |
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| author | Abdulnafea AL-Zararee Nashat Ali Almasria Qasim Ahmad Alawaqleh |
| author_facet | Abdulnafea AL-Zararee Nashat Ali Almasria Qasim Ahmad Alawaqleh |
| author_sort | Abdulnafea AL-Zararee |
| collection | DOAJ |
| description | This study investigated the impact of Working Capital Management (WCM) and Credit Management Policy (CMP) on the Financial Performance (FP) of Jordanian banks (JB). The study data were obtained from 16 Jordanian banks listed on the Amman Stock Exchange (ASE) between 2017 and 2020. The study used panel data to investigate the relationship between the two independent variables, WCM and CMP, and the dependent variable FP; 64 financial reports to Jordanian banks were analyzed to measure this relationship. To test hypotheses, multiple regression was used. The study found a statistically significant relationship between WCM and FP, and the independent variable was able to explain 34.1% of the changes that occur in the dependent variable. In addition, the outcome approved that there is a statistically significant relationship between CMP and FP. Furthermore, CMP explained about 41.8% of changes in the dependent variable. The findings of this study indicate support for the banks’ performance; a bank may need to lengthen client credit terms, prolong the cash transfer cycle, and require a more extended payment period when judging on WCM.
Acknowledgment The publication of this research has been supported by the Deanship of Scientific Research and Graduate Studies at Philadelphia University – Jordan. |
| first_indexed | 2024-12-10T22:55:30Z |
| format | Article |
| id | doaj.art-8c5f7e2d232641db85efdd0c5e865206 |
| institution | Directory Open Access Journal |
| issn | 1816-7403 1991-7074 |
| language | English |
| last_indexed | 2024-12-10T22:55:30Z |
| publishDate | 2022-01-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Banks and Bank Systems |
| spelling | doaj.art-8c5f7e2d232641db85efdd0c5e8652062022-12-22T01:30:17ZengLLC "CPC "Business Perspectives"Banks and Bank Systems1816-74031991-70742022-01-0116422923910.21511/bbs.16(4).2021.1916040The effect of working capital management and credit management policy on Jordanian banks’ financial performanceAbdulnafea AL-Zararee0Nashat Ali Almasria1Qasim Ahmad Alawaqleh2https://orcid.org/0000-0001-6964-4785Ph.D., Faculty of Business, Department of Finance and Banking, Philadelphia UniversityPh.D., Assistant Professor, Faculty of Business, Department of Accounting, Philadelphia UniversityPh.D., Associate Professor in Accounting, Faculty of Business, Department of Accounting, Philadelphia UniversityThis study investigated the impact of Working Capital Management (WCM) and Credit Management Policy (CMP) on the Financial Performance (FP) of Jordanian banks (JB). The study data were obtained from 16 Jordanian banks listed on the Amman Stock Exchange (ASE) between 2017 and 2020. The study used panel data to investigate the relationship between the two independent variables, WCM and CMP, and the dependent variable FP; 64 financial reports to Jordanian banks were analyzed to measure this relationship. To test hypotheses, multiple regression was used. The study found a statistically significant relationship between WCM and FP, and the independent variable was able to explain 34.1% of the changes that occur in the dependent variable. In addition, the outcome approved that there is a statistically significant relationship between CMP and FP. Furthermore, CMP explained about 41.8% of changes in the dependent variable. The findings of this study indicate support for the banks’ performance; a bank may need to lengthen client credit terms, prolong the cash transfer cycle, and require a more extended payment period when judging on WCM. Acknowledgment The publication of this research has been supported by the Deanship of Scientific Research and Graduate Studies at Philadelphia University – Jordan.https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/16040/BBS_2021_04_AL-Zararee.pdfcredit managementfinancial performanceworking capital |
| spellingShingle | Abdulnafea AL-Zararee Nashat Ali Almasria Qasim Ahmad Alawaqleh The effect of working capital management and credit management policy on Jordanian banks’ financial performance Banks and Bank Systems credit management financial performance working capital |
| title | The effect of working capital management and credit management policy on Jordanian banks’ financial performance |
| title_full | The effect of working capital management and credit management policy on Jordanian banks’ financial performance |
| title_fullStr | The effect of working capital management and credit management policy on Jordanian banks’ financial performance |
| title_full_unstemmed | The effect of working capital management and credit management policy on Jordanian banks’ financial performance |
| title_short | The effect of working capital management and credit management policy on Jordanian banks’ financial performance |
| title_sort | effect of working capital management and credit management policy on jordanian banks financial performance |
| topic | credit management financial performance working capital |
| url | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/16040/BBS_2021_04_AL-Zararee.pdf |
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