The effects of working capital management on SMEs profitability in Malaysia

This study investigates the effect of working capital management on SMEs profitability in Malaysia using a sample of 66 SME manufacturing firms covering from 2006 until 2012. Ordinary least square (OLS) regression is used to estimate the relationship between the independent and dependent variable...

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Main Author:	Rahima, Abbas Ali
Format:	Thesis
Language:	eng eng
Published:	2015
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/4601/1/s815149.pdf https://etd.uum.edu.my/4601/2/s815149_abstract.pdf
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id	my-uum-etd.4601
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Abdul Adzis, Azira
topic	HG Finance
spellingShingle	HG Finance Rahima, Abbas Ali The effects of working capital management on SMEs profitability in Malaysia
description	This study investigates the effect of working capital management on SMEs profitability in Malaysia using a sample of 66 SME manufacturing firms covering from 2006 until 2012. Ordinary least square (OLS) regression is used to estimate the relationship between the independent and dependent variables. The results show that, there is negative relationship between working capital management measures i.e. days account receivables (DAR), inventory turnover in days (ITID), and cash conversion cycle (CCC) and SMEs profitability proxies i.e. return on assets (ROA) and return on equity (ROE) except for net operating profit (NOP) which is having positive effect with CCC. Furthermore, the study shows that there is positive relationship between days account payables (DAP) and SMEs profitability measured by (ROA and ROE) but having a negative relation with NOP. The results imply that Profitability of SME manufacturing firms depends upon effective working capital management. Therefore, this study suggests that SME manufacturing companies can improve their profitability by managing working capital properly.
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Rahima, Abbas Ali
author_facet	Rahima, Abbas Ali
author_sort	Rahima, Abbas Ali
title	The effects of working capital management on SMEs profitability in Malaysia
title_short	The effects of working capital management on SMEs profitability in Malaysia
title_full	The effects of working capital management on SMEs profitability in Malaysia
title_fullStr	The effects of working capital management on SMEs profitability in Malaysia
title_full_unstemmed	The effects of working capital management on SMEs profitability in Malaysia
title_sort	effects of working capital management on smes profitability in malaysia
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2015
url	https://etd.uum.edu.my/4601/1/s815149.pdf https://etd.uum.edu.my/4601/2/s815149_abstract.pdf
_version_	1747827762839683072
spelling	my-uum-etd.46012021-04-05T01:01:14Z The effects of working capital management on SMEs profitability in Malaysia 2015 Rahima, Abbas Ali Abdul Adzis, Azira Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HG Finance This study investigates the effect of working capital management on SMEs profitability in Malaysia using a sample of 66 SME manufacturing firms covering from 2006 until 2012. Ordinary least square (OLS) regression is used to estimate the relationship between the independent and dependent variables. The results show that, there is negative relationship between working capital management measures i.e. days account receivables (DAR), inventory turnover in days (ITID), and cash conversion cycle (CCC) and SMEs profitability proxies i.e. return on assets (ROA) and return on equity (ROE) except for net operating profit (NOP) which is having positive effect with CCC. Furthermore, the study shows that there is positive relationship between days account payables (DAP) and SMEs profitability measured by (ROA and ROE) but having a negative relation with NOP. The results imply that Profitability of SME manufacturing firms depends upon effective working capital management. Therefore, this study suggests that SME manufacturing companies can improve their profitability by managing working capital properly. 2015 Thesis https://etd.uum.edu.my/4601/ https://etd.uum.edu.my/4601/1/s815149.pdf text eng public https://etd.uum.edu.my/4601/2/s815149_abstract.pdf text eng public masters masters Universiti Utara Malaysia Afza, T., and Nazir, M. S, (2009), Impact of aggressive working capital management policy on firms' profitability, The IUP Journal of Applied Finance, 15(8), 20-30. Afza, T. and Nazir, M. S. (2007). 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The effects of working capital management on SMEs profitability in Malaysia

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