The effects of working capital management on corporate performance - Evidence from non-finance firms on HOSE in Vietnam
Abstract
The purpose of this research is to analyze the effects of management of working capital on corporate performance by using the data collected 230 listed firms on both Ho Chi Minh Stock Exchange (HOSE). In the paper, Cash conversion cycle (CCC) is the factors of Working Capital Management (WCM) and Tobin’Q ratio is also factors of Financial performance. In addition, there are four control variables including Firm size, Leverage, Growth opportunities, Return on assets. To evaluate the panel data, Fixed-Effects regression model are chosen. By using Fix-Effects regression model, I found that the cash conversion cycle has a significant positive relationship and corporate performance. Therefore, the managers need to consider managing working capital at the optimum lever for each industry to help firm create more profits.
Keywords: return on asset, cash conversion cycle, Tobin’Q ratio, HOSE, significant, insignificant