Appeasing company owners through effective working capital management

Salla Marttonen, Sari Viskari and Timo Kärri

International Journal of Managerial and Financial Accounting, 2013, vol. 5, issue 1, 64-78

Abstract: In the dynamic financial climate of the present day, companies should be aware of the potential of effective working capital management in reacting to market transformations. It is important to include the company owner's viewpoint in the research perspective. In this paper, we study the connection between working capital management and the return on equity. The managerial and financial perspectives of flexible asset management are integrated through analytical modelling. We conclude that the return on equity can be improved by shortening the cycle time of operational working capital. Both the interest rate of debt and the debt-to-equity ratio are taken into account in order to study the effects of dynamic financial conditions. Changes in the financial conditions could be compensated through effective management of working capital.

Keywords: working capital; return on equity; interest rate of debt; debt-to-equity ratio; modelling; flexible asset management; FAM; market transformation; company owners. (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=52422 (text/html)
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:ids:injmfa:v:5:y:2013:i:1:p:64-78

Access Statistics for this article

More articles in International Journal of Managerial and Financial Accounting from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().