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:	eng eng aa
Published:	2019
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/8296/1/depositpermission_s817413.pdf https://etd.uum.edu.my/8296/2/s817413_01.pdf https://etd.uum.edu.my/8296/3/s817413_references.docx
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id	my-uum-etd.8296
record_format	uketd_dc
spelling	my-uum-etd.82962021-05-31T03:54:25Z The relationship between working capital and firm performance in Malaysia 2019 Rajespari, Kumar Mazlan, Ahmad Rizal Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business 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 https://etd.uum.edu.my/8296/ https://etd.uum.edu.my/8296/1/depositpermission_s817413.pdf text eng staffonly https://etd.uum.edu.my/8296/2/s817413_01.pdf text eng public https://etd.uum.edu.my/8296/3/s817413_references.docx text aa public other masters Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng aa
advisor	Mazlan, Ahmad Rizal
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
qualification_name	other
qualification_level	Master's degree
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
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2019
url	https://etd.uum.edu.my/8296/1/depositpermission_s817413.pdf https://etd.uum.edu.my/8296/2/s817413_01.pdf https://etd.uum.edu.my/8296/3/s817413_references.docx
_version_	1747828369605525504

The relationship between working capital and firm performance in Malaysia

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