Working Capital Management Programs： Yesterday, Today, Tomorrow

The paper develops a view on the history and future of working capital programs and focuses on the state of the art in four remarkable years： 1900, 1930, 1960, and 1990. In these years, an operations approach, an accounting approach, an economic approach, and a capital market approach, respectively, were prevalent. The paper shows that all of the approaches have their merits for today＇s working capital management （WCM） programs and discusses useful working capital program indicators, taking into account the cash conversion cycle （CCC） and its delineation into accounts receivables （A/R）, inventory, and accounts payables （A/P） periods. This enables the author to take step ahead to the magic year 2020. Finally, the paper discusses briefly an academic development agenda.

Working capital management and corporate performance： Case of Malaysia

Working capital always being disregard in financial decision making since it involve investment and financing in short term period. However, it is an important component in firm financial management decision. An optimal working capital management is expected to contribute positively to the creation of firm value. To reach optimal working capital management firm manager should control the trade off between profitability and liquidity accurately. The intention of this study is to examine the relationship between working capital management and firm profitability. Cash conversion cycle is used as measure of working capital management. This study is used panel data of 1628 firm-year for the period of 1996-2006 that consist of six different economic sectors which are listed in Bursa Malaysia. The coefficient results of Pooled OLS regression analysis provide a strong negative significant relationship between cash conversion cycle and firm profitability. This reveals that reducing cash conversion period results to profitability increase. Thus, in purpose to create shareholder value, firm manager should concern on shorten of cash conversion cycle till optimal level is achieved.

The impact of working capital management on credit rating

This study investigates the possible nonlinear relationship between working capital and credit rating.Furthermore,it examines the relationship between the three components of working capital(inventory,accounts receivable,and accounts payable)and a firm’s credit rating.Employing data for U.S listed firms for the period between 1985 and 2017,the results of our ordered probit model show a nonlinear relationship between working capital and its components and credit rating.Finally,we find that the deviation from the optimal working capital adversely affects the credit rating.The results of this study are of significant importance for policy makers,managers,decision makers,and credit-rating agencies,as they help highlight the importance of working capital management for a firm’s credit rating.

Does Working Capital Cause Profitability？ --The Nigerian Experience

The paper investigates the long run relationship and causality issues between working capital and profitability in 66 firms in Nigeria by using the panel cointegration method for the period 1999-2007. The empirical results show that there is long run steady-state relationship between working capital and profitability. However, the short run causal relationship runs from working capital to profitability suggesting that inefficient working capital management may harm profitability.

Relationship Between Working Capital Management and Profitability in Turkey Industrial Listed Companies

The present study investigated the effect of working capital management component on corporate profitability. A sample of 106 firms listed on Borsa Istanbul Stock Exchange （BIST） for the period of 2003-2013 was used. The secondary data for analysis were taken from Bloomberg＇s Database. The present study aims to explore the effect of working capital management components on corporate profitability. We observed that there was a negative correlation between gross operating profit and accounts receivables （A/R）. We also found that there was a positive correlation between gross operating profit and number of days inventory. But they did not affect the profitability of firms in the study at a significant level.

The Relationship Between Working Capital Management and Profitability of Companies Listed on the Johannesburg Stock Exchange

Efficient working capital management is an integral component of the overall corporate strategy to create shareholders＇ wealth. This paper seeks to extend findings regarding the relationship between working capital management and profitability. A sample of 69 companies listed on the Johannesburg Stock Exchange （JSE） for the period from 1998 to 2008 was selected. The results revealed a statistically significant negative relationship among profitability （as measured through gross operating profit）, the cash conversion cycle （CCC）, and number of days accounts receivable （AR）. The results also revealed a positive and significant relationship among profitability, the number of days accounts payable （AP）, and the number of days inventory （INV）. The results suggested that managers could increase their company＇s profitability by effectively managing the CCC and its components.

The Effect of Net Working Capital on Jordanian Industrial and Energy Sectors＇ Net Cash Flows Employed in Operating Activities

The primary objective of the cash flow statement is to provide useful, meaningful, and relevant information about the cash receipts and cash payments of a firm during a given period of time. Decision makers can achieve extra features of the change in net assets, the firms＇ financial position （liquidity and solvency）, and the firm＇s ability to adapt to changing circumstances by affecting the amount and timing of cash flows. Cash flow statements improve comparability as they are not affected by differing accounting policies used for the same type of transactions or events. This study aims to verify the effect of net working capital （NWC）, as an indicator of a company＇s short-term liquidity or its ability to meet short-term obligations, on Jordanian industrial and energy sectors＇ net operating cash flows （NOCF）. A simple liner regression is used to test a period of 2008-2011 in order to conclude the extent of the effect on industrial and energy sectors. The study showed that there is a significant effect of the independent variable NWC on the dependent variable NOCF among industrial and energy sectors in Jordanian market. Whereas the adjusted R-squared of test is 0.854, changes in NOCF in Jordanian industrial and energy sectors have been described by NWC. Also, the study reached that the utilities and energy sector has the lowest NWC, while the mining and extraction sector has the highest. And, electrical industries sector has the lowest NOCF, while the mining and extraction sector has the highest. Moreover, the study showed that the printing and packaging sector has the lowest NWC, while the mining and extraction sector has the highest. And, glass and ceramic industries sector has the lowest NOCF, while the utilities and energy sector has the highest.

Problems and Countermeasures of Working Capital Management in Company V

Working capital is the premise for the production and operation of an enterprise and the basis for all financial management.The management of working capital has gained more attention by enterprises.The purpose of emphasizing the importance of working capital management is to enable enterprises to make full and efficient use of capital.There is a serious shortage of working capital in China's home appliance manufacturing industry,and with the rapid development of home appliance manufacturing industry,the problem is becoming increasingly prominent.Therefore,improving the management level of working capital,optimizing the structure of capital,and improving the efficiency of working capital should become the most important part in the process of daily production and operation.This article selects company V as the research subject as it has representative problems in working capital management.Drawing on the theoretical method of taking elements as the core,this article focuses on the analysis of each working capital project and the development status of the company as a whole,determmes the problems in the aspects of current assets and infbnnation communication in regard to the working capital management of company V as well as puts forward several suggestions in terms of current assets management.In order to improve the working capital management level of company V9 we hope that the improvement suggestions derived from the combination of theory and practical analysis can provide some reference for other enterprises in the household appliance manufacturing industry.

Two-level uncapacitated lot-sizing problem considering the financing cost of working capital requirement

During financial crisis,companies constantly need free cash flows to efficiently react to any uncertainty,thus ensuring solvency.Working capital requirement(WCR)has been recognized as a key factor for releasing tied up cash in companies.However,in literatures related to lot-sizing problem,WCR has only been studied in the single-level supply chain context.In this paper,we initially adopt WCR model for a multi-level case.A two-level(supplier–customer)model is established on the basis of the classic multi-level lot-sizing model integrated with WCR financing cost.To tackle this problem,we propose sequential and centralized approaches to solve the two-level case with a serial chain structure.The ZIO(Zero Inventory Ordering)property is further confirmed valid in both cases.This property allows us to establish a dynamic programming-based algorithm,which solves the problem in O(T).Finally,numerical tests show differences in optimal plans obtained by both approaches and the influence of varying delays in payment on the WCR of both actors.

Changes of the Level of Liquidity in Time of the Financial Crisis： A Case of Polish Companies

The financial crisis undoubtedly exerted a pressure on the companies operating in Poland. Thus, it is important to undertake researches that reveal the paths and strength of the transmission of financial crisis with regard to the business entities. This paper presents partial results of the researches dedicated to the analysis of the impact of financial crisis on the financial situation of companies operating in Silesian Region in Poland. It analyses and discusses the general changes in the financial ratios that inform about the company＇s financial liquidity and the level of liquidity risk. As a research paper, it aims at justifying hypotheses about the changes of liquidity and liquidity risk in companies operating in Poland, Silesian Region within the period of 2006-2009. The tested hypotheses generally indicate the decrease of liquidity in the aftermath of crisis and a worse situation in the Silesian Region, as compared to the national level. The study is based on an application of a part of authors＇ self-developed method--the CFS Watch （Corporate Financial Situation Watch）, which consists of five analytical modules. In this study, one module is applied： the FLA Module （Financial Liquidity Analysis） with regard to financial liquidity and the level of liquidity risk. The research is based on the data collected by the Polish Central Statistical Office. The analysis of FLA Module is based on two samples of companies： companies operating in the Silesian Region （denoted as the MEPP sample）, and companies operating in Poland （denoted as the MAPP sample）. This allows developing a comparative analysis between regional and national dimension. The results of the study represent an interesting starting point for further comparative researches based on the analysis of the changes in the level of liquidity and liquidity risk of companies operating in different countries. It may form a base for finding similarities or differences in their financial situation in the aftermath of the financial crisis. The CFS Watch method in terms of the liquidity can be widely applied to make the results comparable.

The Impact of Turnover Ratios on Jordanian Services Sectors＇ Performance

Profitability ratios are a group of financial ratios that indicate how much profit a business is earning within a certain context, while asset utilization ratios indicate how efficient a business is in operating its assets to generate cash. The difference between profitability ratios and turnover ratios is the fact that turnovers are more specific. While profitability ratios measure overall performance in terms of profits, asset utilization ratios focus on specific measurements within the business） We conduct this study to verify the impact of turnover ratios on Jordanian services sectors＇ performance during the period from 2009 to 2012. The study showed that there is no significant impact of turnover ratios on Jordanian services sectors＇ profitability, and by testing the main and sub hypotheses, the study revealed that there is no significant impact of turnover ratios on Jordanian services sectors＇ return on assets （ROA）, there is no significant impact of working capital turnover on Jordanian services sectors＇ ROA, there is no significant impact of total asset turnover on Jordanian services sectors＇ ROA, and there is no significant impact of fixed asset turnover on Jordanian services sectors＇ ROA. Also, the study showed that there is no significant impact of turnover ratios on Jordanian services sectors＇ return on equity （ROE）, there is no significant impact of working capital turnover on Jordanian services sectors＇ ROE, there is no significant impact of total asset turnover on Jordanian services sectors＇ ROE, and there is no significant impact of fixed asset turnover on Jordanian services sectors＇ ROE. Moreover, the study concluded that the educational services sector has the lowest working capital turnover and healthcare services sector has the highest. In addition, we find that the hotels and tourism sector has the lowest total asset turnover ratio, while the utilities and energy sector has the highest and that the hotels and tourism sector has the lowest fixed asset turnover, while the utilities and energy sector has the highest. The transportation sector has the lowest ROA and technology and communication sector has the highest. Finally, we find that transportation sector has the lowest ROE and the technology and communication sector has the highest.