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Cited by 22Working Capital and Financial PerformanceSupply Chain and Inventory ManagementFinancial Analysis and Corporate Governance

The DOI matches its Crossref record; 65 of the 65 references it cites were found in a registry or an index.

Influence of working capital efficiency on firm’s composite financial performance: evidence from India

Kumar, Shiv Shankar, Sawarni, Kumar Sanjay, Roy, Subrata, G, Naresh·2024·International Journal of Productivity and Performance Management
DOI 10.1108/ijppm-07-2023-0374
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Abstract

Purpose The objective of this paper is to investigate the effect of working capital efficiency (WCE) and its components on the composite financial performance of a sample of Indian firms. Design/methodology/approach Our sample includes 796 non-financial listed firms from 2015–16 to 2021–22. Sample firms’ profitability, liquidity, solvency, cash flow management, and financial and operational leverage have been used to classify them into companies with high composite financial performance (HCFP) and with low composite financial performance (LCFP) by using K-Means Clustering technique. A composite financial performance score (CFPS) of 1 has been assigned to HCFP and 0 to LCFP. We have used logistic regression models with fixed effect to estimate the effect of cash conversion cycle (CCC) and its components, i.e. inventory days, accounts receivable days and accounts payable days on CFPS in the presence of control variables such as growth, leverage, firm size, and age. Findings The study finds that CCC and inventory days are inversely associated with CFPS. This finding shows that the firms’ WCE leads to superior financial performance on a composite basis. Research limitations/implications The research findings are based on samples drawn from the population of the listed Indian non-financial companies. Since the operation, financial practices, working capital policies, and management styles of firms vary greatly among nations, the results of this study should be extended to firms in…

Overview

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Crossref · 10.1108/ijppm-07-2023-0374

Cites

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Citations

Cites

Research works printed but not linked: 7

  1. 2006, The determinants of working capital management, Journal of American Academy of Business, 10, 149
  2. 2004, Working capital management efficiency: a study on the Indian cement industry, The Management Accountant, 39, 363
  3. 2008, Factors determining working capital management in cement industry, South Asian Journal of Management, 15, 64
  4. 1996, Working capital's role in maintaining corporate liquidity, TMA Journal, 16, 4
  5. 1998, Efficiency of working capital management and corporate profitability, Financial Practice and Education, 8, 37
  6. 1980, Profitability versus liquidity tradeoffs in working capital management, Readings on the Management of Working Capital, 42, 549
  7. 2000, Fundamentals of Financial Management

Cited by

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Metadata

Authors
Kumar, S. S., Sawarni, K. S., Roy, S., & G, N.
Affiliations
  • Mahatma Gandhi Central University (IN)
  • Manipal Academy of Higher Education (IN)
Corresponding author
Kumar, Shiv Shankar
ORCID
Venue
International Journal of Productivity and Performance Management
Publisher
Emerald
Published
2024-04-04
Volume
73
Issue
9
Pages
2787-2806
ISSN
  • 0043-8022 (ISSN-L)
  • 1741-0401
DOI
10.1108/ijppm-07-2023-0374
OpenAlex
W4393898969
Cited by
14
References
65
Citations by year
2026: 5 · 2025: 5 · 2024: 4
FWCI
13.93
Type
journal article
Language
en
Open access
closed
Licence
www.emerald.com/insight/site-policies (tdm)
Locations
  • International Journal of Productivity and Performance Management (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Topics
  • Social Sciences › Business, Management and Accounting › Accounting › Working Capital and Financial Performance
  • Social Sciences › Decision Sciences › Management Science and Operations Research › Supply Chain and Inventory Management
  • Social Sciences › Business, Management and Accounting › Accounting › Financial Analysis and Corporate Governance
Keywords
working capital efficiency, cash conversion cycle, inventory days, working capital management, Indian listed companies, non-financial firms, inventory management, credit sales, vendor payments, portfolio optimization, firm size, firm age, profitability, liquidity, solvency, cash flow management, leverage, operating leverage

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Data sources

Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.