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The relationship between working capital and firm performance in Malaysia

The study investigated the relationship between working capital and firm performance of 272 listed firms in Malaysia for 2012 – 2016. The dependent variable to measure firm performance is Return on Asset (ROA). The independent variable used in this research are Average collection period (ACP), Inven...

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Main Author: Rajespari, Kumar
Format: Thesis
Language:English
English
English
Published: 2019
Subjects:
HG Finance
Online Access:http://etd.uum.edu.my/8296/
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spelling my.uum.etd.82962021-05-31T03:54:25Z http://etd.uum.edu.my/8296/ The relationship between working capital and firm performance in Malaysia Rajespari, Kumar HG Finance The study investigated the relationship between working capital and firm performance of 272 listed firms in Malaysia for 2012 – 2016. The dependent variable to measure firm performance is Return on Asset (ROA). The independent variable used in this research are Average collection period (ACP), Inventory conversion period (ICP), Average payable period (APP), Cash conversion cycle (CCC) and Current Ratio (CR). Findings of the panel data regression reveal that Average collection period and Inventory conversion period are significantly negatively correlated to firm performance. This suggests that the shorter the period, the higher the firm performance among firms in Malaysia. However Average payable period, Cash conversion cycle and Current ratio is significantly and positively correlated to firm performance. This suggests that the longer the firm delays payment to creditors, the higher will be firm performance through the utilization of opportunity cost. The findings of this study assert that in general, Malaysian firms are seems to make short term decision when it comes to managing their working capital and cash cycle. Among all the components of working capital, firm choose to stretch their payables. For future studies, researchers are recommended to look into the requirement of working capital based on industry and examine its impact on firm performance. 2019 Thesis NonPeerReviewed text en /8296/1/depositpermission_s817413.pdf text en /8296/2/s817413_01.pdf text aa /8296/3/s817413_references.docx Rajespari, Kumar (2019) The relationship between working capital and firm performance in Malaysia. Masters thesis, Universiti Utara Malaysia.
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Electronic Theses
url_provider http://etd.uum.edu.my/
language English
English
English
topic HG Finance
spellingShingle HG Finance
Rajespari, Kumar
The relationship between working capital and firm performance in Malaysia
description The study investigated the relationship between working capital and firm performance of 272 listed firms in Malaysia for 2012 – 2016. The dependent variable to measure firm performance is Return on Asset (ROA). The independent variable used in this research are Average collection period (ACP), Inventory conversion period (ICP), Average payable period (APP), Cash conversion cycle (CCC) and Current Ratio (CR). Findings of the panel data regression reveal that Average collection period and Inventory conversion period are significantly negatively correlated to firm performance. This suggests that the shorter the period, the higher the firm performance among firms in Malaysia. However Average payable period, Cash conversion cycle and Current ratio is significantly and positively correlated to firm performance. This suggests that the longer the firm delays payment to creditors, the higher will be firm performance through the utilization of opportunity cost. The findings of this study assert that in general, Malaysian firms are seems to make short term decision when it comes to managing their working capital and cash cycle. Among all the components of working capital, firm choose to stretch their payables. For future studies, researchers are recommended to look into the requirement of working capital based on industry and examine its impact on firm performance.
format Thesis
author Rajespari, Kumar
author_facet Rajespari, Kumar
author_sort Rajespari, Kumar
title The relationship between working capital and firm performance in Malaysia
title_short The relationship between working capital and firm performance in Malaysia
title_full The relationship between working capital and firm performance in Malaysia
title_fullStr The relationship between working capital and firm performance in Malaysia
title_full_unstemmed The relationship between working capital and firm performance in Malaysia
title_sort relationship between working capital and firm performance in malaysia
publishDate 2019
url http://etd.uum.edu.my/8296/
_version_ 1702172049274830848
score 13.211869

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