The Effect of Working Capital on Profitability: Evidence from Romania
The golden rule of financial equilibrium state the noncurrent resources should finance noncurrent assets and current resources should finance current assets. Managing working capital suppose to provide cash, which is indispensable for a company to run its day-by-day activities. The main aim of this paper is to test for a sample of Romanian publicly companies if working capital is managed at an optimum level, and if companies hold too much or too less cash, which obviously would affect profitability. The results suggest that in order to increase profitability managers from Romanian publicly companies could increase profitability by reducing the number of days cash conversion cycle and, as second result, companies do not hold too much cash.
Year of publication: |
2013
|
---|---|
Authors: | Claudiu, Boþoc |
Published in: |
Ovidius University Annals, Economic Sciences Series. - Facultatea de Ştiinţe Economice, ISSN 1582-9383. - Vol. XIII.2013, 1, p. 1114-1118
|
Publisher: |
Facultatea de Ştiinţe Economice |
Subject: | profitability | working capital | days of inventories | days of accounts receivable | days of accounts payable |
Saved in:
freely available
Saved in favorites
Similar items by subject
-
Threshold effect of working capital management on firm profitability : evidence from Vietnam
Nguyen Thanh Hung, (2022)
-
Enqvist, Julius, (2014)
-
Perera, Wasantha, (2018)
- More ...