Working capital management as an apparatus for the profit maximization to SMEs /
Using a sample of 66 Small and Medium Enterprises (SMEs) manufacturing firms from 2014 to 2020, this study investigates the effect of working capital management on SMEs' profitability in Malaysia. To estimate the relationship between the independent and dependent variables, ordinary least squar...
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| Format: | Thesis Book |
| Language: | English |
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| Summary: | Using a sample of 66 Small and Medium Enterprises (SMEs) manufacturing firms from 2014 to 2020, this study investigates the effect of working capital management on SMEs' profitability in Malaysia. To estimate the relationship between the independent and dependent variables, ordinary least squares (OLS) regression is used. The findings indicate a negative relationship between working capital management measures such as days account receivables (DAR), inventory turnover in days (ITID), and cash conversion cycle (CCC) and SMEs profitability proxies such as return on assets (ROA) and return on equity (ROE), with the exception of net operating profit (NOP), which has a positive relationship with CCC. Furthermore, the study finds a positive relationship between days account payables (DAP) and SMEs profitability (ROA and ROE), but a negative relationship with NOP. According to the findings, the profitability of SME manufacturing firms is dependent on effective working capital management. As a result, this study suggests that SME manufacturing firms can improve their profitability by properly managing working capital.
KEY WORDS: Working capital, working capital management, manufacturing Sector, Malaysia, SMEs, profitability. |
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| Physical Description: | 41 leaves ; 30 cm. |