The effect of working capital management on firm profitability : evidence from manufacturing firms listed on Bursa Malaysia / Nur Athirah Ja'afar

The main purpose of this study was to examine the effect of working capital management on the firm profitability of manufacturing firms listed on Bursa Malaysia. The specific objective of this study was to determine the effects of the independent variables which are Average Collection Period (ACP), Inventory Conversion Period (ICP) and Average Payment Period (APP) on firm performance of listed manufacturing firms on Bursa Malaysia. Firm performance was measured using dependent variable which is Return on Assets (ROA). This study used descriptive research design to describe the effects of working capital management on firm profitability. The target population was the 10 selected manufacturing firms which are listed at Nairobi Securities Exchange. A census of the 9 firms listed manufacturing on Bursa Malaysia from year 2006 to 2015 was the sample. This research project utilized secondary data, which was collected by use of content analysis obtained from the Datastream. The collected data was entered into the Eviews8 and Pooled OLS regression analysis method was used to analyze the data. In the regression model, it revealed a significant effect and negative relationships among Average Collection Period (ACP), Inventory Conversion Period (ICP) and Average Payment Period (APP). This study also recommends that manufacturing firms should ensure that they have a framework on managing the working capital since it has direct impact on their profitability.