scholarly journals Investment and Financing Constraints in China: Does Working Capital Management Make a Difference?

2011 ◽  
Author(s):  
Sai Ding ◽  
Alessandra Guariglia ◽  
John B. Knight
Keyword(s):  
Financing Constraints ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Investment And Financing

scholarly journals Key factors in working capital management in the Brazilian market

2012 ◽  
Vol 52 (1) ◽  
pp. 55-69 ◽  
Author(s):  
Nathalie Vicente Nakamura Palombini ◽  
Wilson Toshiro Nakamura
Keyword(s):  
Balance Sheet ◽  
Internal Variables ◽  
Capital Management ◽  
Key Factors ◽  
Working Capital ◽  
Public Companies ◽  
Working Capital Management ◽  
Financing Decisions ◽  
Investment And Financing

Many studies have been conducted in corporate finance regarding long-term investment and financing decisions. However, short-term asset investments play a significant role in the balance sheet of companies. Moreover, financial managers dedicate significant amounts of time and effort to the subject of working capital management, balancing current assets and liabilities. This paper provides insights regarding the key factors of working capital management by exploring the internal variables of a number of companies. This study used data from 2,976 Brazilian public companies from 2001 to 2008, and found that debt level, size and growth rate can affect the working capital management of companies.

scholarly journals Working Capital Management Policies and Returns of Listed Manufacturing Firms in Ghana

2017 ◽  
Vol 64 (2) ◽  
pp. 255-269 ◽  
Author(s):  
Anokye M. Adam ◽  
Edward Quansah ◽  
Seyram Kawor
Keyword(s):  
Stock Exchange ◽  
Manufacturing Firms ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Financing Policies ◽  
Current Asset ◽  
Investment And Financing ◽  
Management Policies ◽  
Ghana Stock Exchange

Abstract This study sought to determine the effects aggressive/conservative current asset investment and financing policies have on firms′ return for six manufacturing firms listed at Ghana Stock Exchange for a period of 2000-2013. Data were obtained from the annual reports of the firms and the Ghana Stock Exchange. The study adopted longitudinal explanatory non-experimental research design applied to dynamic panel ARDL framework in analyzing the data. The results revealed that the current asset investment and financing policies have highly significant positive effects on returns to equity holders in the long-run. The empirical evidence suggests that conservative current asset investment policies increase firms return while conservative financing policies yields negative returns. The study therefore would enable finance managers to be able to fashion out the appropriate working capital management policies. A firm pursuing conservative current asset investment policy should balance it with aggressive current asset financing policy in order to enhance profitability and create value for their investors.

Do working capital management practices influence investment and financing patterns of firms?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ahsan Akbar ◽  
Xinfeng Jiang ◽  
Minhas Akbar
Keyword(s):  
Capital Structure ◽  
Negative Relationship ◽  
Capital Management ◽  
Working Capital ◽  
Short Term ◽  
Working Capital Management ◽  
Content Type ◽  
Investment And Financing ◽  
The Impact

PurposeThe present study aims to investigate the impact of working capital management (WCM) practices on the investment and financing patterns of listed nonfinancial companies in Pakistan for a span of 10 years.Design/methodology/approachThe study is based on secondary financial data of 354 listed nonfinancial Pakistani firms during the period of 2005–2014. The two-step generalized method of moment (GMM) regression estimation technique is employed to ensure the robustness of results.FindingsEmpirical testing reveals that: excessive funds tied up in working capital have a negative impact on the investment portfolio of sample firms. Besides, a negative relationship between change in fixed assets and excess net working capital posits that, eventually, firms use idle resources tied up in short-lived assets to boost their investment activities. Furthermore, larger working capital levels were associated with higher leverage ratio which indicates that firms with inefficient WCM policies have to rely heavily on long-term debt to meet their short-term financing requirements. Additional results indicate that firms that take more time to sell inventory and convert receivables to cash, make more use of debt. Results of cash management models illustrate that cash-rich firms have lower leverage levels which signal the strong financial health and internal revenue generation capability of such firms.Originality/valueThere is a dearth of empirical studies that examine the implications of WCM decisions on a firm's capital structure. Besides, these studies are only confined to how a WCM policy influences the long-term investment activities of a firm. The research contributes to the extant literature by empirically revealing a link between the WCM practices and the firm's long-range investment and financing patterns. Hence, financial managers shall account for the impact of their short-term financial management decisions on the capital structure of the firm.

The working capital management based on vendor relationship – “icing on the cake” or “timely help”

2018 ◽  
Vol 9 (2) ◽  
pp. 199-224
Author(s):  
Zhenjie Wang ◽  
Zhuquan Wang
Keyword(s):  
Supply Chain ◽  
Listed Companies ◽  
Economic Consequences ◽  
Financing Constraints ◽  
Capital Management ◽  
Working Capital ◽  
Continuous Growth ◽  
Working Capital Management ◽  
Content Type ◽  
Industry Competition

PurposeUnder the guidance of Professor Wang Zhuquan’s channel-based working capital management concept, this paper, using a sample of A-listed companies from 2007 to 2013, aims to explore the possibility of measuring vendor relationships from the supply chain (channel) perspective for the first time, making universal testing for working capital management based on vendor relationships. Through systematically answering the question of who is the biggest beneficiary of working capital management based on vendor relationships and to discuss whether suppliers are more willing to provide “timely help” to weak enterprises or to exert an “icing on the cake” effect on strong enterprises, this paper provides a systematic explanation of the causes and economic consequences of working capital management based on vendor relationships.Design/methodology/approachThe authors constructed three models to test the hypotheses of this study. Model (1) explores the cause of working capital management based on vendor relationship from three angles: market position, industry competition degree and property right. Models (2) and (3) examine the economic consequences of working capital management based on vendor relationship from the two aspects of alleviating financing constraints and improving enterprises’ sustained growth capability.FindingsWorking capital management based on vendor relationships has a more significant “timely help” effect on weak companies, which was proved by the inclination of companies with lower market positions, higher industrial competition and private ownerships to adopt working capital management based on vendor relationships. From the perspective of economic consequences, while China’s listed companies benefit generally from working capital management based on vendor relationships, the weak enterprises are the biggest beneficiaries. Based on vendor relationships, the weak enterprises can relieve financing constraints and improve continuous growth capacity. It provides further evidence that suppliers could provide “timely help” to weak enterprises.Originality/valueThe results of this study find that the competition between supply chains replaces the competition among enterprises, and suppliers are more willing to provide “timely help” to weak enterprises rather than to exert an “icing on the cake” effect on strong enterprises. In addition, the working capital management based on vendor relationships facilitates the cooperation of enterprises and suppliers and improves the overall efficiency of the supply chain.

scholarly journals Practices and Stability of Working Capital Investment and Financing Policies: Evidence from Malaysia Public Listed Companies

2020 ◽  
Vol 17 (2) ◽  
pp. 311
Author(s):  
Mohamad Shahril Ishak ◽  
Noryati Ahmad ◽  
Fahmi Abdul Rahim
Keyword(s):  
Capital Investment ◽  
Management Practices ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Correlation Test ◽  
Financing Policies ◽  
Capital Financing ◽  
Investment And Financing ◽  
Industry Sectors

Working capital management is related to the operating activities of a company and therefore is one of the most significant decisions that managers need to make. Despite the important function of working capital management, this area has been very scantily researched. Aggressive or conservative working capital investment and financing policies imply the liquidity position of the company that could affect its operating profit. Not much is known about the working capital management practices among Malaysian companies. Hence, this study takes the task of investigating the trend and practices of working capital management policies of the Malaysian public listed in seven industry sectors. The industry sectors involved are industrial products, trading and services, consumer, properties, construction, plantation and technology. A total of 573 companies are involved in covering the period from 2001 until 2017. Using one-way ANOVA analysis, mean difference t-test and rank correlation test several findings were discovered. The practices of working capital investment policy (WCIP) for most industry sectors are consistently being applied throughout the study period instead of implementing the working capital financing policy (WCFP). Furthermore, the industry means ratio differences of WCIP and WCFP are statistically significant in most industry sectors studied even though the results of WCFP are mostly negative. This connotes a distinct difference in the asset management and financing policies between industry sectors. Lastly, the insignificant statistically negative results of the rank coefficient of correlation test provides inconclusive evidence if the conservative (aggressive) WCIP pursued is accompanied by the aggressive (conservative) WCFP.

Pengaruh Manajemen Modal Kerja Terhadap Profitabilitas Dan Risiko

Liquidity ◽  
2017 ◽  
Vol 6 (2) ◽  
pp. 95-102
Author(s):  
Sri Setia Ningsih
Keyword(s):  
T Test ◽  
Raw Material ◽  
Risk Level ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Trading Company ◽  
Regression Correlation ◽  
Descriptive Method

The purpose of this research is to know about working capital management applied, and its influence on profitability and risk. The research object is trading company moves in import & distribute chemical raw material. The research used analysis descriptive method, and the hypothesis was testing by simple linier regression, correlation, and determination. The result of the research shows that the effect of the implementation of working capital management on the change of the net working capital with tend to rise has a profitability level of 10.4% lower than the net working capital change with tend to go down of 46%, but instead on the risk level, the net working capital change with tend to rise has a risk level of 43.8% higher than the change in net working capital with tend to go down of 0.3%.Based on  t test, the result shows that the net working capital change influence  is not significant  to profitability and risk.

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