Period and Working Capital Turnover Ratio which were also the independent

Period and working capital turnover ratio which were

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Period and Working Capital Turnover Ratio, which were also the independent variables, on Return on Assets (ROA), which was also the dependent variable of the study. The research design of the study was descriptive explanatory. Quantitative methods were used for this research since it helped in theory and hypothesis testing, gathering a large number of data, which was more suitable to respond the questions, whether this method was more objective and reliable but was not affected by personal opinion researchers in the phenomenon. Econometric Views software was used in this study to analyze the data collected. Three data analysis methods were used in the research and they are regression, correlation and descriptive statistics. In their study, the researchers found cash conversion cycle has significant positive impact on return on asset, which indicates that the quick conversion of cash places a significant influential impact on the profitability of the consumer product company registered in Bursa Malaysia.
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WORKING CAPITAL AND PROFITABILITY 18 Ng, Ye, Ong, & Teh (2017) conducted a study to investigate the relationship between working capital management and firm’s profitability of Malaysian listed manufacturing firms. The companies were selected through convenience sampling technique. The researcher used secondary source for data on industrial products sector of Bursa Malaysia Main board for the 6-year period from 2007 to 2012. Data was obtained from the annual reports of 122 firms listed in the industrial products sector of Bursa Malaysia Main board. The objective of the study was to examine the impact of working capital management from the aspects of aggressive working capital policy and efficiency of working capital management. The study stated the GOI is used as the measure of profitability and GOI is more related to study CCC. The periods of inventory collection, account receivables, account payables are then used in order to investigate the management of each component of the CCC. In order to examine the success or failure of firm’s operation, the study used gross operating profit for measuring profitability instead of earnings before interest tax depreciation and amortization. Except for the negative relationship between RCP and firms’ profitability, no statistically significant relationship between account payable period and profitability as well as no significant relationship between ICP and profitability was found in the study. However, the study found a positive relationship between CCC and gross operating profit. Jakpar (2017) conducted a study on 164 firms from manufacturing sector in Malaysia to examine the relationship between working capital management and profitability of firms. The financial data were collected from the DataStream and the annual report of relevant companies listed in Malaysia. The dependent variable in this study was return on asset, as a measure for firm’s profitability where as independent variable consisted of cash
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WORKING CAPITAL AND PROFITABILITY 19
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