Improving profitability by managing working capital in the value chain of pulp and paper industry

Sari Viskari, Miia Pirttila and Timo Karri

International Journal of Managerial and Financial Accounting, 2011, vol. 3, issue 4, 348-366

Abstract: Working capital management is an essential element in short-term financing and cash flow. Previous studies have also discussed the impact of working capital management on the relative profitability of a company. In this paper, we study the effect of the management of working capital components (inventories, accounts receivable and accounts payable) on profitability in the context of the value chain. The findings suggest that the components of working capital should be managed together to achieve positive effects on profitability. Companies also need to take account of the other companies of the value chain in their management of working capital components.

Keywords: working capital management; inventories; accounts receivable; accounts payable; profitability; value chain; pulp and paper industry; short-term financing; cash flow. (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ids:injmfa:v:3:y:2011:i:4:p:348-366

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