The Impact of Cash Conversion Cycle on Profitability of the Firms with Respect to S&amp;amp;P BSE SENSEX India

Marisetty, Nagendra; Madasu, Pardhasaradhi

doi:10.2139/ssrn.3704300

Cited by 2 publications

(2 citation statements)

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“…This article is divided into five parts, the first part is the introduction, the second part is the literature review, the third part is a research methodology, the fourth part is data analysis and the fifth part is the conclusion. Marisetty and Madasu (2020), they concluded from their study that significant negative relation observed between CCC and profitability of the firm in more classifications that means the shorter length of cash conversion cycle increase the profitability of the firm. Narman (2019), said that net working capital has a favorable relationship with profitability.…”

Section: Introductionmentioning

confidence: 95%

Impact of Working Capital Management on Profitability and Market value of the Logistics Industry

Marisetty¹,

Shreelakshmi²

2022

ijcsrr

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A company needs sufficient non-current assets and current assets for the successful running of the business and maximization of the wealth of the firm. Especially, in the short-run current assets or working capital management plays an important role in the success or failure of the firm and its impact on its profitability of the firm. This article aims to examine the impact of working capital management on the performance and as well as the market value of companies in the logistics industry. This study used the fixed effect panel data analysis with a data set covering six logistics companies listed on the Bombay Stock Exchange, India for the period 2013-2022. To estimate the relationship between working capital management and the performance of companies used Return on Assets (ROA), Return on Equity (ROE), and Market value to Book value (MVBV) as dependent variables in the research models. The main results indicate that the positive relationship between working capital, market value, and profitability is not very clear. Logistics companies’ sales are negatively associated with MVBV and ROE of logistics companies. The cash conversion cycle is found statistically not significant, and the relationship between CCC and profitability is negative. Overall, of the study, it is concluded that working capital has an impact on the profitability of logistics companies in India.

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Section: Introductionmentioning

confidence: 95%

Impact of Working Capital Management on Profitability and Market value of the Logistics Industry

Marisetty¹,

Shreelakshmi²

2022

ijcsrr

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“…CCC is an important tool influencing the short term needs of a company. CCC affects the liquidity requirements of every company, every nature of business, and every business size (Marisetty and Madasu, 2020). Managers make decisions to manage working capital by creating a balance between available current assets and current liabilities.…”

Section: Introductionmentioning

confidence: 99%

Cash Conversion Cycle and Profitability Food and Beverage Companies in Indonesia

Purnamasari,

Purwati,

Windarti

et al. 2023

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One measure used to measure the efficiency of working capital is Cash Conversion Cycle (CCC). The cash conversion cycle is a cycle that describes the length of time it takes a company to convert inventory and receivables into cash and pay debts. The lower the cash conversion cycle, the better. This study aims to analyze the relationship between the cash conversion cycle and profitability. The samples in this study were 17 food and beverage companies listed on the Indonesia Stock Exchange for the 2018 to 2022. This research found that there is a negative relationship between the cash conversion cycle and profitability as measured by Return on Assets and Return on Equity. The shorter the inventory conversion period and the receivables collection period and the longer the debt repayment period, the less cash conversion cycle can be. Reduced or lower cash conversion cycles indicate that the company has been able to optimize the use of its working capital so as to increase profitability.

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The Impact of Cash Conversion Cycle on Profitability of the Firms with Respect to S&P BSE SENSEX India

Cited by 2 publications

References 29 publications

Impact of Working Capital Management on Profitability and Market value of the Logistics Industry

Impact of Working Capital Management on Profitability and Market value of the Logistics Industry

Cash Conversion Cycle and Profitability Food and Beverage Companies in Indonesia

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