The effect of working capital management on profitability of manufacturing industries during covid-19

Adleena, Binti Sazali (2024) The effect of working capital management on profitability of manufacturing industries during covid-19. Master dissertation/thesis, UTAR.

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Abstract

The purpose of this study is to find the empirical evidence between working capital management on company profitability during Covid-19. The main aim of the study was to examine the influence of working capital management has an impact on firm’s profitability of manufacturing industry listed companies in Malaysia during pandemic Covid-19. The secondary data for analysis is collected from DataStream of 100 listed companies randomly selected for seven-year period from 2016 to 2022. The working capital management components used for the purpose of this study was Debt Ratio (DR), Days Inventory Outstanding (DIO), Days Sales Outstanding (DSO) and Days Payable Outstanding (DPO) as independent variable while Return on Assets (ROA) as dependent variable. Descriptive statistics, Pearson’s Correlation analysis, and Regression analysis were employed as measure of analysis. The result show that DR, DIO, DSO DPO have a negative significant effect on profitability. The empirical findings would be useful to managers on financial planning for the companies to maximize firm’s profitability during financial crisis and global financial disruption.

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