Is short-term firm performance an indicator of a sustainable financial performance? Empirical evidence

Abstract

Purpose This study aims to thoroughly examine and understand the relationship between working capital management (WCM) and the sustainable financial performance (FP) in the context of the New Zealand companies listed on stock exchange. Design/methodology/approach This study has applied various regression techniques to examine WCM and the sustainable FP relationship. The data set period is from 2009 to 2019. The results are robust upon various layers of robustness parameters. The system-generalized method of moments is applied for managing endogeneity issue. Findings The research reveals compelling evidence of a meaningful connection between WCM and sustainable FP indicators. The study specifically highlights the significant negative associations between the cash conversion cycle, average collection period and average age of inventory with the firm’s sustainable FP. Through robust analyses and various parameter adjustments, the study ensures the credibility and reliability of its conclusions, further reinforcing the impact of WCM on the financial health of New Zealand-listed firms. Practical implications This study provides future directions for researchers to explore the dynamic relationship between WCM and a firm sustainable FP because it is still a demanding and challenging area. Future research may care to explore the optimal way to reduce the cash conversion cycle, average collection period and average age of inventory for New Zealand firms. The current study does provide insights to NZ financial managers, which is useful for improving sustainable FP by efficiently managing WCM. Originality/value WCM is problematic and constitutes a notable challenge; it requires further research, especially in small economies such as New Zealand. Hence, it is an updated and fresh attempt based on a larger data set to measure the empirical relationship between WCM and the sustainable performance of New Zealand-listed firms. Furthermore, the current study uses dynamic panel data estimation techniques in addition to multiple regression techniques.

Analisis Faktor-Faktor Kinerja Keuangan Terhadap Profitabilitas: Studi Kasus Perbankan Syari’ah di Indonesia Tahun 2020-2022

“…Faktor-faktor tersebut yang menyebabkan pandangan masyarakat mengenai bank syari'ah kurang begitu tinggi, tingkat kepercayaan yang rendah dapat menyebabkan performa perusahaan kurang baik sehingga dapat berdampak pada pendapatan (Oliveira et al, 2023). Peningkatan laba bank syari'ah merupakan hal penting untuk keberlangsungan lembaga baik secara operasional maupun perkembangannya, faktor keuntungan pendapatan atau profitabilitas dapat dilihat melalui indikator kinerja keuangan (Kayani et al, 2023). Pada dasarnya performa lembaga dapat dilihat dan diukur melalui beberapa faktor seperti faktor internal dan faktor eksternal.…”

The Relevance of Sectoral Clustering in Corporate Debt Policy: The Case Study of Slovak Enterprises

“…Through methods and techniques of financial analysis, financial performance describes the achieved corporate financial health (Durica et al 2023;Kaczmarek et al 2021). According to Hedija and Nemec (2021), Jin et al (2022), andKayani et al (2023), data collected through financial performance evaluations have significant explanatory power. Many authors employ intricately constructed systems of indicators or constructed models that are separated into several parts to evaluate the performance of firms (e.g., in terms of labor productivity growth-Lăzăroiu and Rogalska 2023, of deliberate managerial strategy- Vătămănescu et al 2020, andof organizational achievements-Vătămănescu et al 2023) with the intention of introducing a more detailed comprehension of the achieved corporate performance.…”

Guest editorial: Sustainable finance

“…The relationship between green investments and energy commodities is analysed by Sharma et al (2023) and Yadav et al (2023). Another work studies the relationship between short-term firm performance and sustainable financial performance [Kayani et al (2023)]. Finally, ESG-related issues are also an important major part of this special issue [Lange and Banadaki (2023), Peng and Smith III (2023), Niblock (2024) and Tanveer et al (2024)].…”