Working Capital as a Determinant of Corporate Profitability

Ashwin Madhou, Imad Moosa () and Vikash Ramiah
Additional contact information
Ashwin Madhou: School of Economics, Finance and Marketing, RMIT University, Level 11, 445 Swanston Street, Melbourne, Victoria 3000, Australia
Imad Moosa: School of Economics, Finance and Marketing, RMIT University, Level 11, 445 Swanston Street, Melbourne, Victoria 3000, Australia
Vikash Ramiah: School of Commerce, University of South Australia, RM 3.42, 37-44 North Terrace, Adelaide 5000, Australia

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2015, vol. 18, issue 04, 1-17

Abstract: This study examines the interaction of corporate profitability, working capital management and firm characteristics. Advanced quantitative techniques, such as dynamic panel estimation and median regression, are used to test the underlying relations. The findings indicate that both size and debt ratio are important determinants of corporate profitability and that profitable firms and losing firms tend to have different determinants of profitability. Several findings indicate that the effects of the components of working capital on profitability depend on firm characteristics such as the state of working capital (surplus/deficit) and where the firm lies in the profitability league.

Keywords: Corporate profitability; working capital; corporate governance ratings (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0219091515500241
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:rpbfmp:v:18:y:2015:i:04:n:s0219091515500241

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0219091515500241

Access Statistics for this article

Review of Pacific Basin Financial Markets and Policies (RPBFMP) is currently edited by Cheng-few Lee

More articles in Review of Pacific Basin Financial Markets and Policies (RPBFMP) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().