—Working capital is needed for day-to-day
operations of a firm. The primary purpose of this research was
to examine the effects of working capital management on
profitability. The regression analysis was based on a panel
sample of 255 companies listed on the Stock Exchange of
Thailand from 2007 through 2009. The results revealed a
negative relationship between the gross operating profits and
inventory conversion period and the receivables collection
period. Therefore, managers can increase the profitability of
their firms by shortening the cash conversion cycle, inventory
conversion period, and receivables collection period. However,
they cannot increase profitability by lengthening the payables
deferral period. The findings also demonstrated that industry
characteristics have an impact on gross operating profits.
—Cash conversion cycle, thailand, working
K. Napompech is with the Administration and Management College,
King Mongkut’s Institute of Technology, Ladkrabang, Bangkok 10520
Thailand (e-mail: email@example.com, firstname.lastname@example.org).
Cite:Kulkanya Napompech, "Effects of Working Capital Management on the Profitability of Thai Listed Firms," International Journal of Trade, Economics and Finance vol.3, no.3, pp. 227-232, 2012.