This study aims to examine the effect of cash turnover, receivable turnover, inventory turnover, cash conversion cycle, and fixed asset turnover on profitability (ROA) in pharmaceutical subsector companies listed on the Indonesia Stock Exchange (IDX) from 2020 to 2024. The research seeks to understand how working capital efficiency and asset utilization contribute to improving a company’s financial performance, particularly in generating profits.A quantitative approach was applied using secondary data derived from the annual financial statements of pharmaceutical companies. The sample, selected through purposive sampling, consists of 13 companies with a total of 65 observations across five years. Data analysis involved descriptive statistics, classical assumption testing, and multiple linear regression using SPSS version 26 to evaluate the influence of each independent variable on profitability.The findings indicate that receivable turnover, inventory turnover, and the cash conversion cycle have a positive and significant effect on profitability. Meanwhile, cash turnover and fixed asset turnover show no significant influence. Simultaneously, all independent variables significantly affect profitability, with an R² value of 0.523, indicating that 52.3% of profitability variation is explained by the model. These results highlight that efficient management of receivables, inventory, and the cash conversion cycle plays a crucial role in enhancing profitability within the pharmaceutical sector.

The present study has considered securities data and Environmental, Social and Governance (ESG) measures of firms from France, Japan and the United Kingdom. Securities data and ESG measures are subjected to cross-sectional OLS regressions of working capital and cash conversion cycle on ESG risk ratings. Agency cost effects have been found, as ESG risk increased working capital, while reducing the cash conversion cycle. Results are consistent across all three countries. It has been concluded that failure to meet ESG goals increases firm risk. The increase in risk may be met by increasing short-term liquidity. The unnecessary increase in short-term liquidity limits the firm’s ability to employ funds to exploit growth opportunities and maximize shareholder wealth.

This study examines how the efficiency of working capital management (WCM) influences shareholder value in Vietnam, an emerging economy where internal capital allocation is critical. A panel of 150 non-financial firms listed on the Hanoi Stock Exchange from 2015 to 2024 is used, with firms classified annually as financially healthy, distressed, or bankrupt using the Altman Z-score. Unlike prior research that treats financial health as a control, it is used as a central focus. WCM efficiency is measured by residual-based metrics, Efficiency of Net Working Capital (ENWC) and Efficiency of Cash Conversion Cycle (ECCC), which account for firm-specific operational factors. Results how that WCM efficiency positively affects shareholder value only in financially healthy firms; no significant relationship is found in distressed or bankrupt firms. This suggests that the benefits of working capital optimization depend on a firm’s capacity to implement these strategies effectively. The study contributes by combining firm-level health segmentation with refined efficiency measures and highlights the enabling role of technology, such as ERP systems and AI tools, in maximizing WCM effectiveness when financial conditions are stable.

This study examines the influence of working capital management on the financial performance of transportation and logistics companies listed on the Indonesia Stock Exchange (IDX) from Q1 2020 to Q4 2024, with seasonality as a moderating variable. Working capital management is measured through Cash Conversion Cycle (CCC), Days Sales Outstanding (DSO), Days Inventory Outstanding (DIO), and Days Payable Outstanding (DPO), while financial performance is measured using Return on Assets (ROA) with leverage and firm size as control variables. Using a quantitative approach with panel data regression analysis and Moderated Regression Analysis (MRA), this study analyzes 100 quarterly observations from five transportation and logistics companies. The results show that CCC, DSO, and DIO have a significant negative effect on ROA, while DPO shows a positive but not significant effect. Seasonality significantly moderates the relationship between CCC, DSO, and DIO with ROA, indicating that seasonal variations strengthen the negative impact of working capital inefficiency on financial performance. These findings provide important implications for companies to optimize working capital management strategies by considering seasonal patterns in the transportation and logistics industry.

Purpose This study investigates how top executive tournament incentives influence supply chain efficiency and how these effects depend on supply chain risks, specifically operational risk and disruption risk. Design/methodology/approach Our sample consists of 19,669 observations from 1994 to 2023, covering 1,560 unique US firms across the manufacturing, wholesale and retail sectors. Using two-stage least squares, we empirically examine whether top executive tournament incentives, proxied by pay dispersion, are related to supply chain performance, captured by inventory efficiency and the cash conversion cycle. We further test how this relationship is moderated by operational risk, captured through the bullwhip effect and disruption risk, captured through the onset of COVID-19. Findings Firms with greater executive pay dispersion achieve more efficient supply chain performance by reducing operational slack, resulting in higher inventory efficiency and shorter cash conversion cycles. However, this positive effect weakens under high operational risk, particularly among firms experiencing pronounced bullwhip effects. Furthermore, the disruption risk triggered by COVID-19 significantly diminishes the influence of executive pay dispersion on supply chain efficiency across all firms following the outbreak of the pandemic. Originality/value This paper provides the first evidence that top executive tournament incentives are associated with improved supply chain efficiency, but primarily in relatively stable environments where reducing operational slack translates into better performance. Under heightened operational and disruption risks, however, the need for buffer inventory, cross-functional coordination, and information sharing limits the effectiveness of tournament incentives. These findings integrate economic and operations perspectives to offer a richer understanding of how executive incentives shape supply chain management.

Corporate sustainability, previously viewed through environmental, social, and governance (ESG) lenses, is now integral to strategic and financial performance. This study investigates the impact of corporate sustainability on the working capital management efficiency (WCME) of listed companies in Nigeria. Drawing on stakeholder theory and resource-based theory, the study conceptualizes corporate sustainability in a composite perspective and assesses its impact on WCME. The empirical analysis utilizes panel data from listed non-financial firms (2014 – 2024). The findings revealed that corporate sustainability performance exerts an adverse and statistically noteworthy effect on both the cash conversion cycle (CCC) and the WCME score. The findings have recommendations for policymakers, corporate managers, and investors, highlighting the need for firms to develop strategies that facilitate efficient working capital management while pursuing sustainability. The policymakers and firm managers must maintain this balance, to ensure sustained operational performance and the overall financial health of the firms.

ABSTRACT We address whether and why a firm's operational effectiveness, , has information content for investors and what role that information plays in the price discovery process at quarterly earnings announcements. We measure using the cash conversion cycle (CCC) multiplied by −1, such that higher reflects better operational effectiveness. Higher is associated with higher abnormal stock returns and trading volume at earnings announcements and with higher future earnings and cash flows, which helps explain the positive return and volume relations. Higher also is associated with larger post‐earnings‐announcement drift and less timely incorporation of information in earnings announcements into stock prices. However, this relation largely is attributable to firms that announce bad earnings news. Together, we infer that operational effectiveness is informative to investors because it comprises forward‐looking information about earnings and cash flows and that announcements of improvements in along with bad earnings news impede the price discovery process.

Supply chain resilience, cash conversion cycle, and E-commerce firm performance

This study delves into the evolution of Working Capital Management (WCM) strategies by integrating traditional financial methodologies with advanced Machine Learning (ML) and Deep Learning (DL) techniques. Recognizing the critical role of efficient WCM in ensuring a firm's liquidity, profitability, and sustainable growth, especially within the context of seasonal fluctuations, supply chain complexities, and evolving economic landscapes in India, this research aims to provide a comprehensive framework for optimizing working capital. The study will first establish a baseline using conventional WCM approaches, focusing on the management of cash, inventory, accounts receivable, and accounts payable, and their impact on the Cash Conversion Cycle (CCC). It will then explore how ML algorithms, such as Random Forest and Gradient Boosting, can be applied to large historical datasets to identify the most significant internal and external factors influencing working capital needs, thereby improving forecasting accuracy for key components like sales demand, inventory levels, and payment patterns. Furthermore, Deep Learning models, particularly Long Short-Term Memory (LSTM) networks, will be deployed to capture complex temporal dependencies and non-linear relationships in highly volatile financial data, enabling more precise, real-time cash flow and working capital requirement predictions. The performance of these AIdriven models will be rigorously evaluated against traditional forecasting methods (e.g., ARIMA, regression analysis) using metrics like Mean Absolute Percentage Error (MAPE) and Root Mean Squared Error (RMSE). Ultimately, this research seeks to demonstrate how the synergy between established WCM principles and cuttingedge AI technologies can lead to superior liquidity management, reduced financing costs, minimized stockouts or excess inventory, and enhanced overall financial resilience for businesses in India.

The present study aims to examine the impact of the business cycle on the relationship between working capital management (WCM) and profitability in Jordanian manufacturing firms listed in the Amman Stock Exchange (ASE). The present research endeavors to analyze the effect of the business cycle on the association between WCM and the profitability of 38 manufacturing companies listed in the Amman Stock Exchange (ASE) during the period from 2009 to 2020. The dependent variable, return on Assets (ROA), is examined in conjunction with the independent variable, working capital management (WCM), while controlling for the variables of Firm Size and Leverage. Descriptive statistics, correlation analysis, and multiple regression are employed to test the hypotheses. The findings indicate that the Cash Conversion Cycle (CCC) has a significant and negative impact on firm profitability, implying that reducing the cycle size can enhance profitability. Moreover, the results suggest that the business cycle has a slightly moderate, but statistically significant, relationship with the Cash Conversion Cycle and profitability. The results further reveal that Leverage has a detrimental effect on profitability, whereas Firm Size has a positive impact. This study provides valuable insights for stakeholders, such as creditors, investors, and managers, to make informed investment decisions and efficiently manage working capital.

The short-term financing methods that Tata Steel Limited and the Steel Authority of India Limited (SAIL) have chosen to implement are investigated in this paper, along with the consequences such policies have for the management of liquidity. Both of these businesses are active in the very capital-intensive steel industry in India, which is a sector in which effective management of working capital and liquidity is essential for ensuring continued operational stability and competitiveness. The research is centered on examining short-term sources of financing, such as trade credit, commercial paper, short-term loans, and bank overdrafts, as well as the influence that these sources have on key liquidity indicators, such as the current ratio, the quick ratio, and the cash conversion cycle. According to the findings, Tata Steel employs a strategy for short-term financing that is more market-driven and varied. In order to keep its liquidity in a healthy state, the company makes use of commercial papers and manages its receivables in an effective manner. SAIL, on the other hand, is more dependent on bank borrowings and trade payables, which is indicative of a conservative financing structure that can sometimes limit the flexibility of liquidity. Tata Steel has superior liquidity resilience and quicker cash flow turnover due to better alignment between financing choices and operational cycles, as shown by the comparison research. This is despite the fact that both companies retain acceptable short-term solvency. According to the findings of the study, the implementation of proactive short-term financing solutions, which include dynamic cash flow forecasting and a balanced mix of internal and external funding sources, considerably improves the management of liquidity in companies that rely heavily on capital. The policymakers, financial managers, and investors who are interested in evaluating the liquidity sustainability of the Indian steel business will find these findings extremely useful.

This research investigates the effect of working capital management (WCM) on the financial performance (FP) of manufacturing companies in Nigeria. Effective WCM promotes liquidity, solvency, profitability, and overall operational efficiency, making it a critical aspect of organisational financial strategy. It plays a key role in enhancing firm performance, supporting industrial expansion, and driving economic growth. The objective of this study is to explore the link between WCM practices and financial performance indicators. Manufacturing firms, as vital drivers of Nigeria’s economic advancement, often face challenges in managing their working capital efficiently. The study focuses on Nigerian manufacturing companies listed on the Nigerian Exchange Group over ten years (2014-2023). Using panel data and panel multiple regression analysis, the study examines how key WCM components like accounts payable, accounts receivable, and cash conversion cycle relate to financial performance measure such as return on assets (ROA). Findings reveal that all components of working capital management significantly influence financial performance. This research contributes to the existing body of knowledge by offering sector-specific evidence on the role of WCM in enhancing financial performance in Nigeria’s manufacturing sector. The study recommends that manufacturing companies strengthen liquidity management through effective coordination of receivables, payables, and cash conversion cycle. The findings have implications for financial managers, policymakers, and investors aiming to promote efficiency and sustainability in Nigeria’s manufacturing industry.

Purpose This study examines the influence of macroeconomic factors on the relationship between working capital management (WCM) and firm profitability, using annual data from 94 firms listed on the Egyptian stock market from 2013 to 2022. The analysis also distinguishes between manufacturing and non-manufacturing firms by dividing the sample accordingly. Design/methodology/approach A dynamic panel data method (system GMM) is used to control the endogeneity problem when studying the relationship between WCM and profitability and the impact of macroeconomic variables on the relationship of interest. These macro variables are the real GDP growth rate, lending interest rate, real exchange rate and inflation rate. The cash conversion cycle (CCC) measures WCM and the return on assets (ROA) for profitability. Findings The results show a positive relationship between CCC and ROA for the whole and manufacturing firms' samples, while the relationship was insignificant for non-manufacturing firms. The results confirm that macroeconomic variables significantly affect the relationship of interest. The GDP growth rate, interest rate and inflation rate make the relationship negative for the entire sample and non-manufacturing firms. However, a positive relationship applied to the manufacturing sample. The results suggest manufacturing firms in Egypt should prioritize extending credit terms during currency devaluations. Originality/value This study broadens the scarce empirical studies on the relationship between WCM and profitability in less developed economies. Additionally, this is the first study in Egypt to investigate the impact of macroeconomic variables on firm profitability through WCM, covering multiple sectors and examining four key macroeconomic factors that influence the business environment.

The main objective of research to know that working capital management impacts significantly on the profitability of Pakistani firms. An analysis of 35 large manufacturing companies listed on Pakistan Stock Exchange (PSE) was carried out in study using panel data. The firs' annual financial reports from 2012 to 2024 were the sources used to obtain this information. Using pair wise correlation analysis, it was examined that how working capital management affected businesses in Pakistan. For this purpose, statistical procedures were used to examine the assumed relationships among the research issues under consideration. The results show that liquidity (current ratio) has a beneficial effect on the profitability. An organization's bottom line takes a hit when accounts receivable are overdue. The influence of inventory (days) is negative. Equally detrimental to profitability is the cash conversion cycle, but accounts payable due dates are a positive indicator. The profitability of a corporation is positively affected by its size and sales growth, but negatively affected by financial debt. In this regard, the results provide significant information in reaching the desired conclusion in order to make some suitable decisions about the assumed relationships that may be supportive for the investors and decision-makers in particular situatiuons and contexts.

Purpose Board of directors and audit committee play a key role in shaping the financing structure of a firm. However, the role of cash conversion cycle in affecting these relationships needs further investigation. The objective of the present study is to evaluate the moderating role of cash conversion cycle on the association between board composition, audit committee and financing structure. Design/methodology/approach The study uses panel data of 740 listed non-financial firms across Asian emerging economies, covering the time frame from 2010 to 2024. Furthermore, the study employs a fixed effect model as the primary approach, while the dynamic panel GMM approach is utilized to verify robustness of the main findings. Findings The empirical results of the study indicate a positive and significant impact of board composition, like board size, CEO duality and board independence, on financing structure. Conversely, board gender diversity has a significant and negative influence. In addition, audit committee attributes such as size, effectiveness and audit quality exhibit a positive and significant impact on financing structure. Results show that a longer cash conversion cycle significantly increases the financing structure. In addition, the interaction of the cash conversion cycle with board composition and the audit committee strengthens their positive impacts. Originality/value The study unveils novel insights by focusing on the unexplored moderating role of the cash conversion cycle. By incorporating board dynamics, audit committee features and cash conversion cycle, the study forms a framework that is rarely addressed in existing literature, mainly in the context of an emerging Asian economy.

This study investigated the moderating role of interest rate (IR) and inflation (INF) in the association between financial management practices (FMPs) and financial performance of non-financial companies listed on China’s Shanghai and Shenzhen stock exchanges. Espousing a mixed-methods approach, with quasi-experimental design, grounded in pragmatism, it analysed financial data from 3,689 companies (2010–2019) and interviews, utilising two-step system generalised method of moments, effectively addressing endogeneity and other econometric issues, yielding 36,890 balanced-panel, firm-year observations. Fixed effects and random effects were employed to handle unobserved heterogeneity and guarantee robustness. Findings indicated that, whilst total-debt-to-total-assets ratio and dividend yield significantly and negatively influenced firm financial performance (FFP), total-equity-to-assets-ratio, cash conversion cycle, current ratio, total assets turnover, tangibility, dividend payout ratio, firm size and firm age significantly and positively impacted FFP. These associations were complementarily moderated/strengthened by IR and INF, emphasising the risks of high-borrowing costs for highly-geared companies and stressing the necessity for corporate deleveraging and optimal capital structures. Managers are admonished to engage in diversified projects with positive net present value to guarantee constant cash flows and sustainable dividend payments. Whilst the study’s framework is Chinese-oriented, it is replicable in similar developing economies. It incorporates prior unexploited FMP metrics into the resource-based view theory, extending the theory’s scope, making it more rigorous, robust and generalisable.

How does the quality of institutions influence the cash conversion cycle of firms?

Savings and Credit Co-operative Societies (SACCOs) play a key role in promoting financial inclusion and economic growth. However, many SACCOs in Kenya’s North Rift region have seen a steady decline in their financial performance, particularly in Return on Assets (ROA), over the past five years. This raised concerns about how effectively these institutions manage their working capital. Despite this challenge, little has been done to explore how day-to-day financial decisions especially around receivables, payables, and cash balances affect SACCO performance. The purpose of the research was to determine the effect of working capital management practices on the financial performance of deposit-taking SACCOs in North Rift Counties, Kenya. The specific objectives were: to determine the effect of accounts receivable management on the financial performance of SACCOs in North Rift Counties, Kenya; to determine the effect of accounts payable management on the financial performance of deposit-taking SACCOs in North Rift Counties, Kenya and to establish the effect of cash management on the financial performance of deposit-taking SACCOs in North Rift Counties, Kenya. The study was guided by the cash conversion cycle theory, the trade-off, and the agency theory. An explanatory research design was be used, targeting 27 deposit-taking SACCOs in North Rift Counties. This study relied on secondary data spanning five years (2020–2024), providing a longitudinal view of the target population. Data was obtained from Sacco Societies Regulatory Authority (SASRA) reports and individual SACCO reports, then verified, sorted, and edited before analysis. Statistical Package for the Social Sciences (SPSS) 27 was used for data examination, and findings were presented in tables and figures. Diagnostic tests included normality, multicollinearity, heteroskedasticity, and the Hausman test. Findings revealed that accounts receivable management had a statistically significant negative effect on financial performance, indicating that quicker collection of receivables improved ROA. Accounts payable management had a positive but statistically not significant effect, while cash management showed a strong, statistically significant positive effect, emphasizing the role of liquidity in performance. The research concludes that efficient management of receivables and cash positively impacted SACCO performance, whereas payables management had minimal influence. Based on these findings, the study recommends that SACCOs strengthen their receivables collection processes, improve cash flow planning, and find a balanced approach to managing their payables. Future studies could explore other SACCO types or consider how governance and economic conditions affect financial performance.

This paper explores the relationship between controlling and working capital management in the context of increasingly globalized and dynamic economic environments. As companies face growing demands for timely and high-quality information from both internal and external stakeholders, the role of controlling has become more vital than ever in supporting managerial decision-making. The research question addresses how controlling approaches and systems contribute to the efficient use of working capital and, ultimately, corporate profitability. This is a theoretical and literature-based study, supported by numerous empirical findings cited in the literature, and it applies a qualitative analytical framework to examine various controlling models and their relevance in financial decision-making. Specifically, the paper compares major international controlling approaches – including the German coordination-oriented, the Anglo-Saxon performance-focused, the Scandinavian sustainability-integrated, and the Japanese efficiency-centered systems – emphasizing how each framework supports financial planning, monitoring, and performance optimization. Moreover, the paper focuses on the role of financial controlling in managing liquidity and cash flow, particularly through the lens of working capital components such as inventories, receivables, and short-term liabilities. Key financial indicators such as the Cash Conversion Cycle (CCC), Net Trade Cycle (NTC), Return on Assets (ROA), Gross and Net Operating Profits (GOP, NOP) are also presented to measure the efficiency of working capital use. The study concludes that efficient working capital management is strongly correlated with higher profitability, and highlights the trade-offs between liquidity and profitability that decision-makers must manage. The findings underscore the importance of implementing a hybrid, data-driven controlling system that incorporates precision, strategic alignment, sustainability, and continuous improvement, ensuring long-term competitiveness and financial stability in an uncertain economic landscape. This study will be especially relevant to financial managers, controllers, and organizational decision-makers seeking to align financial operations with broader corporate goals.

This study investigates the relationship between earnings management and the effectiveness of working capital management, as well as the individual components of working capital management. The Beneish M-Score is used as a proxy for earnings management and data from 354 non-financial firms listed on the Ho Chi Minh Stock Exchange in Vietnam are analyzed. Unlike previous studies that have focused on the negative implications of earnings management, this research found a positive impact of earnings management on the efficiency of Vietnamese firms' working capital management. This finding aligns with the goal-setting theory, which suggests that clear objectives can lead to improved performance. The results indicate that managers who engage in earnings management tend to operate with shorter cash conversion cycles and manage their inventory, receivables, and payables in a suboptimal manner. The study also revealed that companies with female and dual-role CEOs exhibit more conservative working capital management. Additionally, it was discovered that firms with longer tenure CEOs typically have more efficient working capital strategies, which can lead to lower expenses and higher productivity.