publication . Article . 2011

RELATIONSHIP BETWEEN WORKING CAPITAL MANAGEMENT AND PROFITABILITY IN BRAZILIAN LISTED COMPANIES

Prof. Dr. Hong Yuh Ching; Prof. MSc. Ayrton Novazzi; Prof. Dr. Fábio Gerab;
Open Access
  • Published: 01 Jan 2011 Journal: Journal of Global Business and Economics, volume 3, issue 1 July, pages 74-86
Abstract
To overcome competition in a very complex environment, few companies have been able to use the optimization of working capital as a real competitive advantage to leverage profit. The objectives of this article are twofold: a) to investigate if there is any difference between corporate profitability and working capital management in two separate groups of companies: working capital intensive and fixed capital intensive; b) to identify the variables that most affect profitability. The profitability was measured in three different ways: return on sales (ROS), on asset (ROA) and on equity (ROE). The independent variables used are cash conversion efficiency, debt rat...
Subjects
free text keywords: working capital, corporate profitability, days receivable, days inventory, days working capital, jel:M0
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