Explaining Factors and Consequences of Working Capital Management Using Content Analysis Approach
Working capital should be available to any company to have the sufficient funds to cover short-term commitments and operating costs in the future. This guarantees the continuity of the company’s activities. Given the significance of the role of working capital management (WCM) in the companies, the...
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| Format: | Article |
| Language: | English |
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Iran Finance Association
1999-12-01
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| Series: | Iranian Journal of Finance |
| Subjects: | |
| Online Access: | https://www.ijfifsa.ir/article_88417_9aa2dc528816bd498d3c2899e4d98937.pdf |
| _version_ | 1811191427383689216 |
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| author | Najmeh Khodabakhshi Gholamreza Soleimani Amiri |
| author_facet | Najmeh Khodabakhshi Gholamreza Soleimani Amiri |
| author_sort | Najmeh Khodabakhshi |
| collection | DOAJ |
| description | Working capital should be available to any company to have the sufficient funds to cover short-term commitments and operating costs in the future. This guarantees the continuity of the company’s activities. Given the significance of the role of working capital management (WCM) in the companies, the study analyzed the content of texts and studies done in this field, presented three main hypotheses and examined the effect of most of the variables affecting WCM (both external and internal factors of the company), as well as the consequences of WCM in 161 companies listed in Tehran Stock Exchange (TSE) during a seven-year period from 2011 to 2017. The purpose of the study was to determine the most important factor affecting WCM and its consequences. The hypotheses were tested using multivariate regression and Granger causality test. The hypothesis testing indicated that extra-organizational factors such as gross domestic product (GDP), inflation rate and exchange rate have the greatest effect on WCM. Moreover, hypothesis testing indicated that some intra-organizational factors, such as current ratio, capital expenditures, financial leverage, return on assets, operating cycle, operating profit return, institutional shareholders ownership-percentage, and independence of board of directors affect WCM. Finally, hypothesis testing showed that optimal capital management improves the firms’ performance. |
| first_indexed | 2024-04-11T15:05:12Z |
| format | Article |
| id | doaj.art-97eb8fcc0ed5411b8f30137964c983e9 |
| institution | Directory Open Access Journal |
| issn | 2676-6337 2676-6345 |
| language | English |
| last_indexed | 2024-04-11T15:05:12Z |
| publishDate | 1999-12-01 |
| publisher | Iran Finance Association |
| record_format | Article |
| series | Iranian Journal of Finance |
| spelling | doaj.art-97eb8fcc0ed5411b8f30137964c983e92022-12-22T04:16:49ZengIran Finance AssociationIranian Journal of Finance2676-63372676-63451999-12-0122295810.22034/ijf.2018.8841788417Explaining Factors and Consequences of Working Capital Management Using Content Analysis ApproachNajmeh Khodabakhshi0Gholamreza Soleimani Amiri1PhD student in accounting, Alzahra University and a lecturer at Payame Noor UniversityAssociate professor at Alzahra University, corresponding authorWorking capital should be available to any company to have the sufficient funds to cover short-term commitments and operating costs in the future. This guarantees the continuity of the company’s activities. Given the significance of the role of working capital management (WCM) in the companies, the study analyzed the content of texts and studies done in this field, presented three main hypotheses and examined the effect of most of the variables affecting WCM (both external and internal factors of the company), as well as the consequences of WCM in 161 companies listed in Tehran Stock Exchange (TSE) during a seven-year period from 2011 to 2017. The purpose of the study was to determine the most important factor affecting WCM and its consequences. The hypotheses were tested using multivariate regression and Granger causality test. The hypothesis testing indicated that extra-organizational factors such as gross domestic product (GDP), inflation rate and exchange rate have the greatest effect on WCM. Moreover, hypothesis testing indicated that some intra-organizational factors, such as current ratio, capital expenditures, financial leverage, return on assets, operating cycle, operating profit return, institutional shareholders ownership-percentage, and independence of board of directors affect WCM. Finally, hypothesis testing showed that optimal capital management improves the firms’ performance.https://www.ijfifsa.ir/article_88417_9aa2dc528816bd498d3c2899e4d98937.pdfcash conversion cycle (ccc)extra-organizational factorsintra-organizational factorsworking capital management (wcm) |
| spellingShingle | Najmeh Khodabakhshi Gholamreza Soleimani Amiri Explaining Factors and Consequences of Working Capital Management Using Content Analysis Approach Iranian Journal of Finance cash conversion cycle (ccc) extra-organizational factors intra-organizational factors working capital management (wcm) |
| title | Explaining Factors and Consequences of Working Capital Management Using Content Analysis Approach |
| title_full | Explaining Factors and Consequences of Working Capital Management Using Content Analysis Approach |
| title_fullStr | Explaining Factors and Consequences of Working Capital Management Using Content Analysis Approach |
| title_full_unstemmed | Explaining Factors and Consequences of Working Capital Management Using Content Analysis Approach |
| title_short | Explaining Factors and Consequences of Working Capital Management Using Content Analysis Approach |
| title_sort | explaining factors and consequences of working capital management using content analysis approach |
| topic | cash conversion cycle (ccc) extra-organizational factors intra-organizational factors working capital management (wcm) |
| url | https://www.ijfifsa.ir/article_88417_9aa2dc528816bd498d3c2899e4d98937.pdf |
| work_keys_str_mv | AT najmehkhodabakhshi explainingfactorsandconsequencesofworkingcapitalmanagementusingcontentanalysisapproach AT gholamrezasoleimaniamiri explainingfactorsandconsequencesofworkingcapitalmanagementusingcontentanalysisapproach |