Management of Working Capital in Entrepreneurship: Empirical Evidence from the Agricultural/Agro-Allied Industry
DOI:
https://doi.org/10.54741/ssjar.2.4.3Keywords:
entrepreneurial behavior, working capital cycle, return on assets, return on equity, agricultural/agro-allied industryAbstract
The study used sample of 3 of the 4 agricultural/agro-allied firms from 2007 to 2018 to examine the relationship between working capital measures and financial performance. The correlation and regression analysis were used to examine the relationship between them. The result of the study shows that profitability of the firms operating in agricultural/agro-allied industry can be influenced positively but not significantly by extending the time the input materials (planted seedlings) stay on the production stage, the time granted to the customers for credit sales of goods and extending the time of paying the suppliers.
Downloads
References
Afza, T., & Nazir, M.S. (2011). Working capital management efficiency of cement sector of Pakistan. Journal of Economics and Behavioral Studies, 2(5), 223-235.
Boer, G. (1999). Managing the cash gap. Journal of Accountancy, 188(4), 27-32
Barine, M.N. (2012). Working capital management efficiency and corporate profitability: Evidences from quoted firms in Nigeria. Journal of Applied Finance and Banking, 2(2), 215-237.
Deloof, M. (2003). Does Working Capital Management affectProfitability of Belgian firms?. Journal of Business Finance and Accounting, 30(3 & 4), 573-588.
Demirgunes, R, & Samiloglu, F. (2008). The effect of working capital management of firm profitability: Evidence from Turkey. The international Journal of Applied Economics and Finance, 2(1), 44-50.
Dong, H. P., & Su, J.T. (2010). The relationship between working capital management and profitability; a Vietnam Case. International Research Journal of Finance and Economics, 49, 59-67.
Eljelly, A. M. A. (2004). Liquidity profitability trade off: an empirical investigation in an emerging market. International Journal of Commerce and Management, 14(2), 48-61.
Ganesan,V. (2007). An analysis of working capital management efficiency in telecommunication equipment industry. Rivier Academic Journal, 3(2), 1-10.
Garcia-Teruel, P.J, & Martinez-Solano, P. (2007). Effects of working capital management on SME profitability. International Journal of Managerial Finance, 3(2), 164-177.
Gill, A, Biger, Nand, & Mathur, N. (2011). The relationship between working capital management and profitability: Evidence from the United States. Business and Economics Journal, 1, 1-9.
Hill,N.C, & Sartoris, W. (2005). Short-term financial management text and cases. New York: Macmillian International.
Jose, Manuel L, Carol Lancaster, & Jerry L. Stevens. (1996). Corporate returns and cash conversion cycles. Journal of Economics and Finance, 20(1), 33-46.
Karaduman, H. A, Akbas, H. E, Caliskan, A. O, & Durer, S. (2011). The relationship between working capital management and profitability: evidence from emerging market. International Journal of Finance and Economics, 62(20), 61-67.
Karaduman, H.A., Akbas, H.E., Ozsozgun, A., & Durer, S. (2010). Effects of working capital management on profitability: the case for selected companies in the Istanbul stock exchange. International Journal of Economics and Finance Studies, 2(2), 47-54.
Lazaridis, I., & Tryfonidis, D. (2006). The relationship between working capital management and profitability of listed companies in the athens stock exchange. Journal of Financial Management and Analysis, 19(1), 26-35.
Losbichler, H, & Rothböck, M. (2008). Der Cash-to-cash Cycle alsWerttreiber in SCM – ErgebnisseeinereuropäischenStudie. Controlling & Management, 52(1), 47-57.
Madishetti, S, & Kibona, D. (2013). Impact of receivables and payables management on the profitability of SMES in Tanzania. Journal of Economics and Management, 2(3).
Mathuva, D. (2010). The influence of working capital management components on corporate profitability: A survey on Kenyan listed firms. Research Journal of Business Management, 4(1), 1-11.
Nazir, M. S, & Afza T. (2009). Impact of aggressive working capital management policy on firms profitability. Journal of Applied Finance, 15(8), 19-30.
Nazir, M.S., & Afza, T. (2009b). Working capital requirements and the determining factors in Pakistan, IUP Journal of Applied Finance, 15(4), 28-38.
Nobanee, H, & Al Hajjar, M. (2009). A note on working capital management and corporate profitability of Japanese firms. Available at: SSRN 1433243.
Nwude, E.C. (2010). Working capital management in Nigerian agro-allied firms. The Nigerian Stockbroker, G, 6, 5-22.
Nzioki, P.M, Kimeli S.K, & Abudho, M. R. (2013). Management of working capital and its effect on profitability of manufacturing companies listed on Nairobi securities exchange Kenya. International Journal of Business and Finance Management Research, 1, 35-42
Padachi, K. (2006). Trends in working capital management and its impact on firms’ performance- An analysis of Mauritanian small manufacturing firms. International Review of Business Research Papers, 2(2), 45-58.
Pauraghajan, A, Rekabdarkolaei, E. A., & Shafie, M. (2013). Investigation the effects of working capital management and capital structure on profitability and return on assets: A selection from the automotive companies in Iran. Journal Basic Applied Science Research, 3(4), 847-854.
Raheman, Aand, & Nasr, M. (2007). Working capital management and profitability- Case of Pakistani firms. International Review of Business Research Papers, 3(1), 279-300.
Rajan, R, & Zingales, L. (1995). What do we know about capital structure? Some evidence from international data. Journal of Finance, 50, 1421-1460.
Richards, V, & Laughlin, E. (1980). A cash conversion cycle approach to liquidity analysis. Financial Management, 9, 32-38.
Ross, S, Westerfield, R, & Jordan, B. (2008). Fundamentals of corporate finance. (8th ed.). McGraw-Hill/Irwin.
Sharma, A. K, & Kumar, S. (2011). Effect of working capital management on firm probability: Empirical evidence from India. Global Business Review, 12(1), 159-173.
Shin, H. H, & Soenen, L. (1998). Efficiency of working capital and corporate probability. Financial Practice and Education, 8(2), 37-45.
Smith, M., & Begemann, E. (1997). Measuring associations between working capital and return on investment. South African Journal of Business Management, 28(1), 1-4.
Uyar, A. (2009). The relationship of cash conversion cycle with firm size and profitability an empirical investigation in Turkey. International Research Journal of Finance and Economics, 24(1), 186-193.
Van-Horne, J.C, & Wachowicz, J. M. (2005). Fundamentals of financial management. (12th ed.). New York: Prentice Hall.
Vishnani, S, & Shah, B.K. (2007). Impact of working capital management policies on corporate performance-an empirical study, Global Business Review, 8(2), 267-281.
Vural, G, Sokmen, A.G, & Çetenak, E.H. (2012). Affects of working capital management on firm’s performance: evidence from Turkey. International Journal of Economics andFinancial Issues, 2(4), 488-495.
Wagner, S., & Locker, A. (2008), Working capital reduzierendurch. Supply Chain Management, Beschaffungs Management, 9, 6-8.
Wang, Y.J. (2002). Liquidity management, operating performance, and corporate value: Evidence from Japan and Taiwan. Journal of Multinational Financial Management, 12(2), 159-169.
Zariyawati, M.A, Annuar, M.N, Taufiq, H, & Rahim, A.S.A. (2009). Working capital management and corporate performance: Case of Malaysia. Journal of Modern Accounting and Auditing, 5(11), 47-54.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Comfort Amaka Nwude
This work is licensed under a Creative Commons Attribution 4.0 International License.
