Malaysian Energy and Oil and Gas Companies: Does Working Capital Management Matter for Their Financial Performance?

A substantial number of oil and gas companies suffered liquidity problem, financial distress, or, in the worst cases, go out of business as a result of the 2014 oil price fall. Poor liquidity management is one of the key factors leading to financial distress and corporate insolvency. Managing workin...

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Main Author:	Nur Rahayu Ellyani, Mohd Rossli
Format:	Thesis
Language:	eng eng
Published:	2022
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/11145/1/depositpermission-826913.pdf https://etd.uum.edu.my/11145/2/s826913_01.pdf
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id	my-uum-etd.11145
record_format	uketd_dc
spelling	my-uum-etd.111452024-06-10T01:40:55Z Malaysian Energy and Oil and Gas Companies: Does Working Capital Management Matter for Their Financial Performance? 2022 Nur Rahayu Ellyani, Mohd Rossli Syed Salim, Syed Mohd Na'im School of Economics, Finance & Banking School of Economics, Finance and Banking HG Finance A substantial number of oil and gas companies suffered liquidity problem, financial distress, or, in the worst cases, go out of business as a result of the 2014 oil price fall. Poor liquidity management is one of the key factors leading to financial distress and corporate insolvency. Managing working capital is among the most crucial aspects of operating a company, necessitating the need for efficient working capital management. Working capital management is known to be crucial during the troubled times of business This study examines the impact that working capital management has on listed oil and gas companies' performance in Malaysia over an 11-year span from 2010 to 2020. The observation period includes the decline in crude oil prices in 2014 and the start of the COVID 19 pandemic in 2020. The study has found out that cash conversion cycle (CCC), days inventory outstanding (DIO), days sales outstanding (DSO) and liquidity (current ratio) have significant impact on the operating performance (operating profit margin) of oil and gas companies in Malaysia. On the other hand, working capital management is found to be insignificant in relation with the return to the shareholders (ROE) except days of payables outstanding (DPO). Contrary to what is typically observed, CCC is positively related to operating profit margin while DIO and DSO are negatively related with it. On the other side, there is a positive relationship between DPO and operating profit margin. The operating profit margin is also positively related with liquidity, which is the standard across all businesses. Based on the findings, it is crucial for oil and gas companies to optimally manage their working capital in order to stay in business. 2022 Thesis https://etd.uum.edu.my/11145/ https://etd.uum.edu.my/11145/1/depositpermission-826913.pdf text eng staffonly https://etd.uum.edu.my/11145/2/s826913_01.pdf text eng public other masters Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Syed Salim, Syed Mohd Na'im
topic	HG Finance
spellingShingle	HG Finance Nur Rahayu Ellyani, Mohd Rossli Malaysian Energy and Oil and Gas Companies: Does Working Capital Management Matter for Their Financial Performance?
description	A substantial number of oil and gas companies suffered liquidity problem, financial distress, or, in the worst cases, go out of business as a result of the 2014 oil price fall. Poor liquidity management is one of the key factors leading to financial distress and corporate insolvency. Managing working capital is among the most crucial aspects of operating a company, necessitating the need for efficient working capital management. Working capital management is known to be crucial during the troubled times of business This study examines the impact that working capital management has on listed oil and gas companies' performance in Malaysia over an 11-year span from 2010 to 2020. The observation period includes the decline in crude oil prices in 2014 and the start of the COVID 19 pandemic in 2020. The study has found out that cash conversion cycle (CCC), days inventory outstanding (DIO), days sales outstanding (DSO) and liquidity (current ratio) have significant impact on the operating performance (operating profit margin) of oil and gas companies in Malaysia. On the other hand, working capital management is found to be insignificant in relation with the return to the shareholders (ROE) except days of payables outstanding (DPO). Contrary to what is typically observed, CCC is positively related to operating profit margin while DIO and DSO are negatively related with it. On the other side, there is a positive relationship between DPO and operating profit margin. The operating profit margin is also positively related with liquidity, which is the standard across all businesses. Based on the findings, it is crucial for oil and gas companies to optimally manage their working capital in order to stay in business.
format	Thesis
qualification_name	other
qualification_level	Master's degree
author	Nur Rahayu Ellyani, Mohd Rossli
author_facet	Nur Rahayu Ellyani, Mohd Rossli
author_sort	Nur Rahayu Ellyani, Mohd Rossli
title	Malaysian Energy and Oil and Gas Companies: Does Working Capital Management Matter for Their Financial Performance?
title_short	Malaysian Energy and Oil and Gas Companies: Does Working Capital Management Matter for Their Financial Performance?
title_full	Malaysian Energy and Oil and Gas Companies: Does Working Capital Management Matter for Their Financial Performance?
title_fullStr	Malaysian Energy and Oil and Gas Companies: Does Working Capital Management Matter for Their Financial Performance?
title_full_unstemmed	Malaysian Energy and Oil and Gas Companies: Does Working Capital Management Matter for Their Financial Performance?
title_sort	malaysian energy and oil and gas companies: does working capital management matter for their financial performance?
granting_institution	Universiti Utara Malaysia
granting_department	School of Economics, Finance & Banking
publishDate	2022
url	https://etd.uum.edu.my/11145/1/depositpermission-826913.pdf https://etd.uum.edu.my/11145/2/s826913_01.pdf
_version_	1804888199855603712

Malaysian Energy and Oil and Gas Companies: Does Working Capital Management Matter for Their Financial Performance?

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