The Relationship between Working Capital Management Efficiency and Financial Performance: The Case of Listed Companies in Agro and Food Industry in Thailand
DOI:
https://doi.org/10.55164/ecbajournal.v15i4.260751Keywords:
Working Capital Management Efficiency, Return on Assets, Efficiency of Assets, Agro and Food IndustryAbstract
This study aims to measure the efficiency of working capital management and examine the relationship between working capital management efficiency and the financial performance of listed companies in the Thai agricultural and food industries. The study's sample group consisted of 53 companies in the agricultural and food industry listed on the Thai Stock Exchange over 11 years (2007-2018). The SETSMART database was employed to collect the data for the study. Working capital efficiency includes the performance index (PI), utilization index (UI), and efficiency index (EI) of working capital management, whereas financial performances include efficiency of asset ratios and return on assets. Data analysis was divided into descriptive statistical analysis, mean analysis, and multiple regression analysis. The results indicated that the company's working capital management had an index value larger than one, showing the efficiency of working capital management, and there was a significant positive relationship between management of working capital efficiency and financial performance. The study's findings emphasize the significance of working capital management, especially effective working capital management, which contributes to improved financial performance. As a result, corporate executives should concentrate on improving working capital management efficiency.
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