The Impact Of Working Capital Management On Profitability: A Case Of Public Listed Firms In Malaysian Energy Industry
This study examines the association between working capital management and firm profitability for a sample size of 30 listed firms in Malaysian energy sector over the period of 2012–2021. Specifically, this study wants to examine the effect of days sales outstanding (DSO), days inventory outst...
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| Main Author: | |
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| Format: | Final Year Project Report |
| Language: | English |
| Published: |
Universiti Malaysia Sarawak, (UNIMAS)
2023
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| Subjects: | |
| Online Access: | http://ir.unimas.my/id/eprint/43772/4/Cynthia%20Yew%20Ho%20Ai.pdf http://ir.unimas.my/id/eprint/43772/ |
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| Summary: | This study examines the association between working capital management and firm
profitability for a sample size of 30 listed firms in Malaysian energy sector over the
period of 2012–2021. Specifically, this study wants to examine the effect of days
sales outstanding (DSO), days inventory outstanding (DIO), and days payable
outstanding (DPO) on return on assets (ROA). Two theories have guided this study
which are efficient market hypothesis theory (EMH) and cash conversion cycle
theory (CCC). Panel regression analysis and Pearson’s correlation coefficient were
used to test the hypothesis. The analysis result indicates that firstly; the results are
consistent with cash conversion theory. Secondly, there is existence of significant
negative relationship between days sales outstanding, days inventory outstanding,
and return on assets, which is firm’s profitability. The result also shows a significant
positive relationship between days payable outstanding and profitability of a firm. |
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