Abstract
The paper is aiming at assessing the effect of cash conversion cycle on firm profitability. Three components are used to measure cash conversion cycle (CCC); average collection period (ACP), average inventory period (AIP) and average payable period (APP). Henceforth, cash conversion cycle and its determinants are taken as independent variables. The dependent variable is profitability being measured by return on asset (ROA) and return on equity (ROE). For the period 2016-2020, data was collected from companies listed on the EGX, regression models are used to test the Hypothesis with a sample of seven firms from various industries. The paper’s results are consistent to those of (Telly & Ansori, 2019), and (Rizky & Mayasari, 2018) showed that, the average collection period and average inventory period have an inverse association with the firm’s profitability (ROA), with the exception of the average payable period. Keywords: Cash Conversion Cycle – Profitability – Return on Asset – Return on Equity.
Published Version
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