The Impact of Working Capital Management on the Profitability of Listed Food Companies in Thailand
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Abstract
This research studies the impact of working capital management on profitability among the food companies listed on the Stock Exchange of Thailand during 2018-2022. The study examines whether a relationship exists between working capital management and firm’s profitability. The measures of working capital management include average collection period, inventory conversion period, average payment period, cash conversion cycle and cash conversion efficiency. Return on equity and return on assets are used as proxies for firm’s profitability. The results confirm the relationship between working capital management and profitability. In particular, a shorter operating cycle and efficient working capital management increase firm’s profitability.
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