The effect of inventory turnover on financial performance of retail supermarket in Malaysia / Nor Aziemah Abdurrasik

The purpose of this study is to examine the effect of inventory turnover on financial performance of retail supermarket in Malaysia. Four independent variables that have been used in this study such as days in account receivable, days in account payable, inventory turnover in days, and cash conversion cycle. Meanwhile return on asset as the dependent variable. Study includes the data from 40 listed companies in Bursa Malaysia from the year 2015 to 2019. Four hypothesis developed to check the relationship among dependent and independent variables. Results show that there is no significant relationship between account receivable and firm’s profitability. There is significant relationship between account payable and firm’s profitability. There is no relationship between inventory turnover and return on asset. There is significant relationship between cash conversion cycle and firm’s profitability. Managing inventory effectively must be a necessity for managers due to its influence on firm performance and the costs that could be incurred if it is not managed optimally. Study recommend, future research should involve an attempt to establish the effect of merging and acquisition on the performance of retail supermarkets in Malaysia.