Determinants of Working Capital Management: Case of Singapore Firms

Mansoori, E, Joriah Muhammad(2012), Determinants of working capital management: Case of Singapore firms, "Research Journal of Finance and Accounting" , Vol 3, No.11, pp.15-23.

10 Pages Posted: 2 Jan 2013 Last revised: 2 Mar 2015

See all articles by Dr Ebrahim Mansoori

Dr Ebrahim Mansoori

University of Kurdistan Hewler

Datin Muhammad

Universiti Sains Malaysia (USM)

Date Written: August 1, 2012

Abstract

It is undeniable that firms cannot survive and continue their daily operations without sufficient level of the working capital. The crucial part of working capital is the management of working capital since it affects both liquidity and profitability of the firms. Determining the important factors affecting working capital management would able managers to manage working capital efficiently and effectively. Therefore, managers should be aware about important factors that affect working capital management. Using panel data analysis including Pooled OLS, random effects and fixed effects estimations, we revealed that firm size, operation cash flow, capital expenditures, and gross domestic products negatively are correlated to the working capital management. Moreover, we found that firms with more profitability have longer cash conversion cycle. Finally, we did not find any significant relationship between cash conversion cycle and debt ratio.

Keywords: working capital management, cash conversion cycle, panel data analysis

JEL Classification: G32

Suggested Citation

Mansoori, Ebrahim and Muhammad, Datin, Determinants of Working Capital Management: Case of Singapore Firms (August 1, 2012). Mansoori, E, Joriah Muhammad(2012), Determinants of working capital management: Case of Singapore firms, "Research Journal of Finance and Accounting" , Vol 3, No.11, pp.15-23., Available at SSRN: https://ssrn.com/abstract=2195245

Ebrahim Mansoori (Contact Author)

University of Kurdistan Hewler ( email )

Hewler
Iraq

HOME PAGE: http://https://www.ukh.edu.krd/

Datin Muhammad

Universiti Sains Malaysia (USM) ( email )

Jalan Sungai Dua
Georgetown, Pulau Penang 11800
Malaysia

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