The impacts of working capital management on profitability of wholesale firm-listed in Ho Chi Minh stock exchange

Abstract

Working capital play an important role in a company that managers must have knowledge in order to maximize their firm’s value. This study is aimed to explore the relationship between working capital and profitability of wholesale firm in Vietnam. This study used secondary data in the annual reports and audited financial statements of a sample of 30 firms for the period of 2013 to 2015. The working capital management promoted by managing the current assets and current liabilities and determined by the cash conversion cycle, receivable cycle, inventory cycle and payable cycle. The profitability refers to return on investment capital (ROI) and return on asset (ROA). The results show market value, profitability and working capital component has a statistically relationship. Therefore, managers can increase the profitability and market value of the firms by improving the performance of working capital management refer to components of cash conversion cycle.