Year of Graduation
Impact of Working Capital Management on the Profitability of Public Listed Firms
This study investigates the effect of Working Capital Management on firm profitability during crisis period of 2008-2009 and non-crisis years 2010-1017. A sample of global top 100 companies by market capitalization is used. Results of regression analyses demonstrate whether companies need to change their non-crisis working capital strategy when the economy comes into a recession. The results of the study proved a significant negative relation between days sales outstanding and firm’s profitability during a non-crisis period, which could be changed during the crisis period. The results of the study showed significant negative relation between days inventory outstanding and days payables outstanding and profitability during the both periods. Based on this fact, companies should keep level of inventories and account payables as low as possible to increase profitability, especially during a crisis period. Significant relation between CCC and profitability was not found. Contribution of the study to the theory and possible practical implications are discussed.