• ISSN: 2010-023X
    • Frequency: Bimonthly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Executive Editor: Ms. Cherry L. Chen
    • Abstracting/ Indexing: Engineering & Technology Digital Library, ProQuest, Crossref, Electronic Journals Library , EBSCO, and Ulrich's Periodicals Directory
    • E-mail: ijtef@ejournal.net
IJTEF 2012 Vol.3(3): 227-232 ISSN: 2010-023X
DOI: 10.7763/IJTEF.2012.V3.205

Effects of Working Capital Management on the Profitability of Thai Listed Firms

Kulkanya Napompech
Abstract—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.

Index Terms—Cash conversion cycle, thailand, working capital.

K. Napompech is with the Administration and Management College, King Mongkut’s Institute of Technology, Ladkrabang, Bangkok 10520 Thailand (e-mail: knkulkan@kmitl.ac.th, kul1998@yahoo.com).

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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.

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