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/lp/inderscience-publishers/the-working-capital-management-on-the-firms-financial-performance-with-DsacLM0o60
- Publisher
- Inderscience Publishers
- Copyright
- Copyright © Inderscience Enterprises Ltd
- ISSN
- 1752-7767
- eISSN
- 1752-7775
- DOI
- 10.1504/ajfa.2022.130375
- Publisher site
- See Article on Publisher Site
Abstract
Few studies have found a moderating effect between working capital management and a firm's financial performance. Due to limited literature and contradictions, this study aims to emphasise the association between working capital management and a firm's financial performance with the moderating effect of management policies using evidence from manufacturing companies listed on the Colombo Stock Exchange from 2014 to 2018. According to Iqbal et al. (2014), 28 manufacturing companies were selected using convenience sampling. This study adopted the quantitative research methodology and used correlation and regression analysis. The results show that a firm's cash conversion cycle affects its return on assets and net profit margin. Effective management policies in terms of inventory age, collection period, and payment period strengthen the relationship between working capital management and firm's financial performance. This study will help financial analysts and managers achieve their goals.
Journal
American Journal of Finance and Accounting – Inderscience Publishers
Published: Jan 1, 2022