receivable conversion period
182386839
PENGARUH NUMBER OF DAYS ACCOUNT RECEIVABLE, NUMBER OF DAYS ACCOUNT PAYABLE, NUMBER OF DAYS INVENTORY,DANCASH CONVERSION CYCLE TERHADAP PROFITABILITAS PERUSAHAAN WHOLESALE AND RETAIL TRADE YANG TERDAFTAR DI BEI PERIODE 2009 2011
ABSTRACT Leny Andriyanti 2013: The effect ofnumber of days account receivable, number of days account payable, number of days inventory, and cash conversion cycle of wholesale and retail trade companies listed on indonesia stock exchange in the period of 2009 2011.Thesis of Jakarta: Concentration of Financial Management, Program Management, Department of Management, Faculty of Economics, State University of Jakarta. The purposes of this study are: analyze the effect of number of days account receivable, number of days account payable, number of days inventory, and cash conversion cycle of wholesale and retail trade companies listed on indonesia stock exchange in the period of 2009 2011 The data used are secondary data obtained from financial statement. The sampling technique used purposive sampling. Sample in the study were 15 companies. The analysis in this study is an analysis of panel data with interpretation of random effect approach. The result of the approach is proven that the number of days account receivableis a significant negative, number of days account payable, and cash conversion cycle is a not significant and number of days inventory is positif significant effect on the profitability of manufacturing companies in Indonesia.Number of Days Account Receivable, Number of Days Account Payable, Number of Days Inventory, dan Cash Conversion Cyclesimultaneouslyinfluenceof wholesale and retail trade companies listed on indonesia stock exchange in the period of 2009 2011. Key words: profitability, number of days account receivable, number of days account payable, number of days inventory, and cash conversion cycle.
Leny Andriyanti
226396670
Ciclo de conversion de efectivo: una herramienta esencial para la evaluacion financiera de la empresa
This article studies the cash conversion cycle as an indispensable tool for the financial evaluation of the company. The cash conversion cycle indicates the time it takes since the merchandise is purchased, sold and re collected. There is the possibility to increase profitability by reducing the collection period of accounts receivable, reducing the inventory conversion period, and extending the payment period. Therefore, the shorter its cash conversion cycle, the more liquidity the entity would have; On the other hand, a low turnover in accounts receivable indicates that the company is taking a long time to recover its sales on credit, hence, the success of the company also depends on the effectiveness of managing its inventory. Therefore, every company should keep in mind that the level of inventory turnover reflects the progress of projected sales, varying, depending on the type of company, being different in both production and sales; A clear example is a comparison between a supermarket and a trucking company. Also, the turnover of how many payable shows the time needed to settle account payments. Therefore, a quick payment allows the company to enjoy the discount and maintain a good reputation with suppliers.
Juan Bernardo Morillo Rodriguez Denis Ivan Llamo Santa Cruz
225837398
Analysis of Working Capital Management and Cash Holding on Profitability of Manufacturing Companies Listed in Indonesia Stock Exchange Period 2014 2018
This research aims to analyze the effect of working capital management on the profitability of manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2014 2018. Working capital management indicators used in this research are the cash conversion cycle (CCC) the inventory conversion period (ICP) the receivable conversion period (RCP) the debt repayment period (PDP) and Cash Holding (CASH) On the other hand, the profitability indicator used in this research is Return On Assets (ROA) The sample data used in this study is taken from the audited financial statements and published on the IDX. According to the sampling technique used in this research, namely purposive sampling, there are 73 companies that fit certain criteria. This research uses descriptive statistics with a quantitative approach and uses time series data regression techniques assisted with the Eviews version 9 program. Hypothesis testing uses F statistical tests, t statistical tests, and coefficient determination with a significance level of 5% The results of this research indicate the simultaneous independent variable (F statistic test) affect the profitability (ROA) with a significance level of 0,000. On the other hand, partially (t test statistic) shows CCC and PDP have positive and not significant effect on profitability, ICP has a negative and no significant effect on profitability, RCP has a negative and significant effect on profitability. Meanwhile CASH has a positive and significant effect on profitability.
Niko Wilfritz Sianipar Syamsu Alam Mursalim Nohong
225754426
The simultaneous determination of cash conversion cycle components
Research Question: What are the interaction effects and links between the cash conversion cycle components? Motivation: One of the major difficulties in studying the links between the components of the cash conversion cycle is the fact that each of them is a determinant of the others. Idea: We develop a model to define the direction of the relations between cash conversion cycle components taking into consideration the contemporaneous correlation between them. Data: For the purposes of our study we use a balance panel dataset from Greek wholesale sector over the period 2005 2014. Tools: Error components three stage least squares estimation for simultaneous equations of panel data is used. Findings: Our results show that inventory, accounts receivable and accounts payable are mutually endogenous factors and identify the causal relationships. We find that not only accounts payable lead to an increase in accounts receivable, but also accounts receivable leads to an increase in accounts payable. We argue that the causes for the effect of receivables on inventory differ from that of inventory on receivables. Contribution: The results of this study would be useful for wholesalers and supply chain managers to analyze and identify the interactions of inventory and trade credit policies. Moreover, our model can be used for the more accurate forecasting of inventory, accounts receivable and accounts payable.
Georgios Kolias Nikolaos Arnis Kostas Karamanis
219109318
The Effect of Cash Conversion Cycle on Profitability of the firm: A Study of Oil Gas and Engineering Sector of Pakistan.
The research is aiming at assessing the effect of cash conversion cycle on profitability of the firm. Three components are used to measure cash conversion cycle (CCC) average receivable period (ARP) average inventory period (AIP) and average payable period (APP) Henceforth, cash conversion cycle and its determinants are taken as Independent variables. The dependent variable is profitability being measured by return on asset (ROA) The data was collected with the help of pooled data containing a sample of 10 firms of two manufacturing sector such as Oil Gas and Engineering, listed on PSX for the period 2010 2018. Regression and correlation techniques were used for analysis and come up with the outcomes that average receivable period and average inventory period have an adverse significant association with profitability of the firm except average payable period. In the end, there exists a highly negative significant association among CCC and firm's profitability as ROA. The results showed that lesser the no. of days of CCC, the firm has greater profitability. This paper contributes to the literature, which shows the association amongst CCC and ROA.
Javed Iqbal
210147687
Cash Conversion Cycle and Profitability, Evidence from Jordan
This study investigates the impact of working capital management and its components on profitability as a practical aspect, and how is compatible with the theoretical aspect. Besides, it examines other financial factors that may affect profitability by using a sample of Jordanian manufacturing firms listed in the Amman Stock Exchange for the period (2016 2018) Theoretically, manufacturing firms that have been studied have current assets over half of their total assets. Therefore, the working capital management role will be clearer on firm profitability.Practically, the results indicate that there is a significant relationship between the cash conversion cycle, which is considered as a proxy of working capital management, and profitability of the manufacturing firms. This provides an opportunity to create value for shareholders by decreasing receivable accounts and inventory, enhancing the profitability of the firms and reducing the collection period and by adopting effective credit policy.
Asian Journal of Finance Accounting
Manar Al-Mohareb
168897522
Analysis Working Capital Management on the Profitability of Manufacturing Company Sector Foods and Consumption Goods Listed on Indonesia Stock Exchange for Period 2011 2015
This research is aimed to evaluate the effect of working capital management toward profitability. The object of this study is manufacturing company sector foods and consumption goods listed on Indonesia Stock Exchange. The period of investigation is from 2011 to 2015 by using the sample of 13 companies. This research has five independent variables which are accounts receivable days, inventory days, accounts payable days, cash conversion cycle, and net trade cycle and two control variables which are sales growth and debt ratio. The result of this study indicate that accounts receivable days, inventory days, accounts payable days, and cash conversion cycle have positive effect toward profitability while the net trade cycle has negative effect toward profitability. Keywords: Working Capital Management, Manufacturing Company, Independent Variables, and Profitability Penelitian ini bertujuan untuk mengevaluasi pengaruh dari manajemen modal kerja terhadap profitabilitas. Objek dari penelitian ini adalah perusahaan manufaktur sektor makanan dan barang konsumsi yang terdaftar di Bursa Efek Indonesia. Periode investigasi adalah dari tahun 2011 sampai 2015 dengan menggunakan sampel 13 perusahaan. Penelitian ini menggunakan lima variabel bebas yaitu accounts receivable days, inventory days, accounts payable days, cash conversion cycle, dan net trade cycle dan dua variabel kontrol yaitu sales growth dan debt ratio. Hasil dari penelitian ini mengindikasikan bahwa accounts receivable days, inventory days, accounts payable days, dan cash conversion cycle memiliki pengaruh positif terhadap profitabilitas sedangkan net trade cycle memiliki pengaruh negatif terhadap profitabilitas. Kata Kunci: Manajemen Modal Kerja, Perusahaan Manufaktur, Variabel Bebas, dan Profitabilitas
Dasmirizal Dasmirizal
106402020
Does Working Capital Management Affect Profitability of Belgian Firms
The relation between working capital management and corporate profitablity is investigated for a sample of 1,009 large Belgian non financial firms for the 1992 1996 period. Trade credit policy and inventory policy are measured by number of days accounts receivable, accounts payable and inventories, and the cash conversion cycle is used as a comprehensice measure of working capital management. The results suggest that managers can increase corporate profitablity by reducing the number of days accounts receivable and inventories. Less profitable firms wait longer to pay their bills. Copyright Blackwell Publishers Ltd 2003.
Marc Deloof
168729293
An Optimal Cash Conversion Cycle
The traditional link between the cash conversion cycle and the firm's profitability is that shortening the cash conversion cycle increases firm's profitability. On the other hand shortening the cash conversion cycle could harm the firm's operations and reduce profitability. This could happen when taking actions to reduce the inventory conversion period, a firm could face inventory shortages; when reducing the receivable collection period a firm could lose its good credit customers; and when lengthening the payable deferral period a firm could harm its own credit reputation. However, identifying optimal levels of inventory, receivables, and payables where total holding and opportunities cost are minimized and recalculating the cash conversion cycle according to these optimal points provides more complete and accurate insights into the efficiency of working capital management. In this regard, we suggest an optimal cash conversion cycle as more accurate and comprehensive measure of working capital management.
Haitham Nobanee Maryam Al Hajjar
56224689
Cash Conversion Cycle and its Impact upon Firm Performance: an Evidence from Cement Industry of Pakistan
Introduction In contemporary global and competitive environment, the sustainability remains dependable on the ability and success of financial management function. In the financial market it became a challenge for a financial manager that how to respond the dynamics of financial markets (Padachi, 2006) The survival of a firm not only depends on how one can efficiently and effectively pursue for its financing and investing opportunities in national and international financial markets' but also how one is managing the financial and operational affairs of the firm. The long run survival can only be possible through efficient management of cash conversion cycle including receivable collection period, inventory conversion period and payable deferral period (Weinraub Visscher, 1998) The efficient use of funds along with efficient operations management is the critical area of financial affairs of a firm. According to Jose and Stevens (1996) cash conversion is a comprehensive measure related with the management of account receivables, management of inventory as well as the management of account payables. The importance of the management of current assets and short term liabilities cannot be ignored in any organization. Researchers all over the world discuss this issue in detail in the perspective of different economies. As far as dev eloping countries are concerned, management of current assets i.e. inventories and account receivables and management of short term liabilities are considered as a life blood for organization. The cash conversion cycle is a result of time taken by the firm for their collection from receivables and time required to convert raw material into finished goods after subtracting the time taken by the firm to pay its current obligation (Deloof, 2003; Lazaridis Tryfonidis, 2006) The sum of inventory conversion time and the time required to collect amount from customers define the firms operating cycle (Uyar, 2009) The concept of operating cycle become deficient due to ignoring the time dimension of current liability commitments which is useful for cash flow measurement and liquidity requirement of the firm (Richards Laughlin, 1980) Cash conversion cycle is a comprehensive performance measure used for reviewing the ability of companies in managing their capital. Cash conversion cycle indicate the efficiency of management of current assets. Shorter the time of cash conversion allows the firms to generate more sales from the amount invested, which shows that business utilized their resources for generating maximum profit (Moss Stine, 1993) Cash conversion cycle for a manufacturing company can be defined as a function of [days of accounts receivable days of inventory days of accounts payable] (Deloof, 2003; Lazaridis Tryfonidis, 2006) The receivable collection period measures the average number of days from the sale of goods on credit to collection from account receivables. It is calculated as (account receivables/sales) *365] The inventory conversion period contain the time required for the conversion of raw material into finished goods. It is calculated as (inventory/cost of goods sold*365] The payable deferral period is the average time needed to purchase goods on credit and final payment for them. It is calculated as (account payable/cost of goods sold) *365] The length of cash conversion cycle is used to measure the impact of accounts receivable, inventories and payments to supplier on the firm's profitability, cash conversion cycle assist in measuring the performance and current assets management of the firm's (Uyar, 2009) Firms experiencing a shorter time span of cash conversion cycle will be able to increase the profitability by managing its credit policy and increasing its inventory levels, while firms having a relatively large length of cash conversion cycles should focus on reducing the investment in the components of working capital.
Muhammad Yasir Abdul Majid Zahid Yousaf