Abstract
The chemical industry is of long-term importance to the maintain development of local economies and consider the largest industrial sectors in Jordan in terms of the exports volume which accomplished JD 1049000S in 2012. Working capital considers being a measure of company’s efficiency and its short-term financial health; moreover, it is a critical component for a business survival and a main item for the hall boost in profitability. While Chemical Industries plays a vital role in Jordanian economic and compose a large portion in the total local output; this study conduct to approve the impact of capital turnover as a measure of efficiency on Chemical companies’ profitability expressed by Return On Assets (ROA). A simple liner regression applied to test a period 2009-2011 in order to conclude the extent of the impact of working capital turnover on Jordanian Chemical industries’ profitability through Return On Assets (ROA). The study showed a significant impact of independent variable working capital turnover on dependent variable return on assets among Chemical Industries listed on Amman Stock Exchange during the period from 2009 to 2011.
Highlights
Activity ratio or asset utilization ratio which known operating efficiency ratios are intended to measure how well accompany manages various activities, hoe efficiently it manages its various assets
A simple liner regression applied to test a period 2009-2011 in order to conclude the extent of the impact of working capital turnover on Jordanian Chemical industries’ profitability through Return On Assets (ROA)
The study showed a significant impact of independent variable working capital turnover on dependent variable return on assets among Chemical Industries listed on Amman Stock Exchange during the period from 2009 to 2011
Summary
Activity ratio or asset utilization ratio which known operating efficiency ratios are intended to measure how well accompany manages various activities, hoe efficiently it manages its various assets. Activity ratios are analyzed as indicator of ongoing operational performance_how effectively assets are used by a company. These ratios reflect the efficient management of both working capital and longer term assets (CFA, 2012a). The Return On Assets (ROA) compares income with total assets. It can be interpreted in two ways. This paper will investigate the impact of operating efficiency presented by working capital turnover on the profitability expressed Return On Assets (ROA) using the data for 11 Jordanian chemical industries listed on Science Publications. Amman stock exchange for the period from 2009 to 2011 and the researcher will try to compare the results with the previous studies in order to approve the consistency with other different economies
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