Working Capital Management, Operating Cash Flow and Corporate Performance

AlShattarat, W. K., Nobanee, H., Haddad, A. E., AlHajjar, M. (2010). Working Capital Management, Operating Cash Flow and Corporate Performance. International Journal of Strategic Management, 10 (1), pp. 84-88.

6 Pages Posted: 10 Sep 2009 Last revised: 14 May 2017

See all articles by Wasim K. AlShattarat

Wasim K. AlShattarat

Gulf University for Science and Technology (GUST)

Haitham Nobanee

University of Oxford; Abu Dhabi University; University of Liverpool

Ayman E. Haddad

American University of Kuwait

Maryam Al Hajjar

Abu Dhabi University

Date Written: November 1, 2010

Abstract

This paper investigates the relationship between working capital management, corporate performance and operating cash flow. The relationship is examined using dynamic panel data analysis. The analysis based on a sample of 5802 U.S. non-financial firms listed in the New York Stock Exchange, American Stock Exchange, NASDAQ Stock Market and the Over The Counter Market for the period 1990-2004 (87030 firm-year observations). The results suggest that managers can increase profitability and operating cash flow of their firms by shortening the cash conversion cycle, and by shortening the receivable collection period. The results also suggest that shortening the inventory conversion period and lengthening the payable deferral period reducing profitability and operating cash flow of firms instead of increasing them.

Keywords: working capital management, cash conversion cycle, receivable collection period, inventory conversion period, payable deferral period, operating cash flow, corporate performance

JEL Classification: G30, G32, L25, O25

Suggested Citation

AlShattarat, Wasim K. and Nobanee, Haitham and Nobanee, Haitham and Haddad, Ayman E. and Al Hajjar, Maryam, Working Capital Management, Operating Cash Flow and Corporate Performance (November 1, 2010). AlShattarat, W. K., Nobanee, H., Haddad, A. E., AlHajjar, M. (2010). Working Capital Management, Operating Cash Flow and Corporate Performance. International Journal of Strategic Management, 10 (1), pp. 84-88., Available at SSRN: https://ssrn.com/abstract=1471236

Wasim K. AlShattarat

Gulf University for Science and Technology (GUST) ( email )

Masjid Al Aqsa Street
Mubarak Al-Abdullah
Kuwait

Haitham Nobanee (Contact Author)

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Abu Dhabi University ( email )

Abu Dhabi
United Arab Emirates

University of Liverpool ( email )

Chatham Street
Liverpool, L69 7ZA
United Kingdom

Ayman E. Haddad

American University of Kuwait ( email )

Department of Accounting
Kuwait, 13034
Kuwait

Maryam Al Hajjar

Abu Dhabi University ( email )

PO Box 59911
Abu Dhabi, Abu Dhabi 59911
United Arab Emirates

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
520
Abstract Views
6,331
rank
77,825
PlumX Metrics