Investigating the impact of working capital management on firm's profitability: analysis from Malaysian forestry and paper industry / Nurul Amira Badrolesham

This paper is made to finding out about the impact of working capital management with profitability to the forestry & paper industry in Malaysia. By using the secondary data for analysis that retrieved from Data Stream, about 10 out of 12 companies was selected in Bursa Malaysia starting periods from 2007 until 2016. In this study, the dependent variable is profitability which is return on assets (ROA) while the independent variable are average collection period (ACP), inventory conversion period (ICP), average payment period (APP), current ratio (CR) and debt ratio (DR). Therefore, it highlights the importance of managing working capital requirement in order to measure the profitability of company performance. All of these variables are used E-views8 software in order to get the result either significant or not. By using regression model, average collection period (ACP), current ratio (CR) and debt ratio (DR) have a positive relationship with return on assets (ROA). Meanwhile, average payment period (APP) and inventory conversion period (ICP) have a negative significant with return on assets (ROA).Thus, the result of this research paper will help the investors to take steps of strategies and able to make decision based on the working capital management.