Working Capital Management and Corporate Profitability of Japanese Firms
The Empirical Economics Letters Volume 13, Number 1, 2014
9 Pages Posted: 26 Jan 2014 Last revised: 31 Dec 2017
Date Written: January 25, 2014
Abstract
This study examines the relationship between working capital management, profitability, firm size and industry type for firms in Japan. The study sample consists of 2123 Japanese non-financial firms listed at the Tokyo Stock Exchange for the period 1990-2004. We observe that the cash conversion cycle and return on investment relationships are commonly significant and negative, suggesting that the shortening of the cash conversion cycle enhances the profitability of Japanese firms.
Keywords: Working Capital Management; Cash Conversion Cycle; Receivable Collection Period; Inventory Conversion Period; Payable Deferral Period; Return On Investment
Suggested Citation: Suggested Citation