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Cited by 58Working Capital and Financial PerformanceSupply Chain and Inventory ManagementFinancial Analysis and Corporate Governance

Financial Performance and Working Capital Management Practices in the Retail Sector: Empirical Evidence from South Africa

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Mandipa, Garikai, Sibindi, Athenia Bongani·2022·Risks
DOI 10.3390/risks10030063
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Abstract

This study examines the relationship between the financial performance and working capital management practices of South African retail firms listed on the Johannesburg Stock Exchange. The study sample comprised a panel of 16 South African retail firms for the period 2010–2019. A fixed-effects estimator was employed in the analysis. The working capital management was proxied by average age of inventory (AAI), average collection period (ACP), average payment period (APP), and cash conversion cycle (CCC), while the financial performance was proxied by net operating profit margin (NOPM), return on assets (ROA), and return on equity (ROE). The key findings of the study documented the following: (1) There is a negative relationship between average collection period and financial performance. (2) A negative relationship between average age of inventory and financial performance measures (NOPM and ROA) was found. (3) The average payment period was found to be negatively related to return on equity. (4) The cash conversion cycle and net operating profit margin variables were found to be negatively related. The study concludes that working capital management practices influenced the financial performance of the South African retail firms. It is recommended that South African retail firms observe prudent optimal working capital management practices, as these influence their financial performance.

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Crossref · 10.3390/risks10030063

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  • The findings for Model 1 are consistent with Jaworski and Czerwonka (2024), Mandipa and Sibindi (2022), and Ngari and Kamau (2022), but not with Briones et al. (2024), Fungai (2024), and Šeligová (2021).

    “The findings for Model 1 in Table 3 are consistent with Jaworski and Czerwonka (2024), Mandipa and Sibindi (2022), and Ngari and Kamau (2022), but not with Briones et al. (2024), Fungai (2024), and Šeligová (2021).”

    From The Effects of Working Capital Management on the Financial Performance of Commercial and Service Firms Listed on the Nairobi Securities Exchange in Kenya (2024) · cites this paper as Mandipa and Sibindi (2022)

    The source’s Empirical Findings report negative relationships between the average collection period and financial performance, and between inventory age and some performance measures. Those results provide a basis for comparison, but the cited paper does not contain the citing document’s Model 1 or Table 3, so our copy cannot establish that their findings are consistent. (LLM, conf=0.75)

    Experimental — accuracy not yet measured

  • Mandipa and Sibindi (2022) used a fixed-effects estimator to investigate the relationship between financial performance and working capital management in retail firms listed on South Africa's JSE, and found that financial performance was negatively related to working capital management.

    “Mandipa and Sibindi (2022) used a fixed-effects estimator to investigate the relationship between financial performance and WCM retail firms listed on South Africa's JSE; the findings indicated that financial performance was negatively related to WCM.”

    From The Effects of Working Capital Management on the Financial Performance of Commercial and Service Firms Listed on the Nairobi Securities Exchange in Kenya (2024) · cites this paper as Mandipa and Sibindi (2022)

  • The finding for Model 3 supports Mandipa and Sibindi (2022), who discovered a significant negative relationship between the average collection period and the net operating profit margin.

    “Lastly, the finding for Model 3 in Table 3 supports the findings of Mandipa and Sibindi (2022), who discovered a significant negative relationship between the average collection period and the net operating profit margin.”

    From The Effects of Working Capital Management on the Financial Performance of Commercial and Service Firms Listed on the Nairobi Securities Exchange in Kenya (2024) · cites this paper as Mandipa and Sibindi (2022)

  • The finding for Model 2 is consistent with Briones et al. (2024), Kumar et al. (2024), Mandipa and Sibindi (2022), Seth et al. (2020), and Panigrahi (2024).

    “Nonetheless, the finding for Model 2 in Table 2 is consistent with Briones et al. (2024), Kumar et al. (2024), Mandipa and Sibindi (2022), Seth et al. (2020), and Panigrahi (2024).”

    From The Effects of Working Capital Management on the Financial Performance of Commercial and Service Firms Listed on the Nairobi Securities Exchange in Kenya (2024) · cites this paper as Mandipa and Sibindi (2022)

    The paper’s Model Specification (§3.2) defines Model 2 using return on equity, and its Conclusions (Tables 5–6; page unavailable) report the corresponding results. The citing sentence does not state what its own Model 2 found, so those passages cannot establish whether the findings are consistent. (LLM, conf=0.72)

    Experimental — accuracy not yet measured

  • This result is consistent with Jaworski and Czerwonka (2024), Mandipa and Sibindi (2022), and Umar and Al-Faryan (2024).

    “This result is consistent with Jaworski and Czerwonka (2024), Mandipa and Sibindi (2022), and Umar and Al-Faryan (2024).”

    From The Effects of Working Capital Management on the Financial Performance of Commercial and Service Firms Listed on the Nairobi Securities Exchange in Kenya (2024) · cites this paper as Mandipa and Sibindi (2022)

    The sentence does not identify what “this result” is, so its consistency with Mandipa and Sibindi (2022) cannot be assessed. The paper’s Conclusions and §4.2 report relationships between working-capital management and financial performance in South African retail firms, but the citing sentence gives no result to compare with them. (LLM, conf=0.76)

    Experimental — accuracy not yet measured

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Cites

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Cited by

Sorted by citations

Authors
Mandipa, G., & Sibindi, A. B.
Affiliations
University of South Africa (ZA)
Corresponding author
Sibindi, Athenia Bongani
ORCID
Venue
Risks
Publisher
MDPI AG
Published
2022-03-10
Volume
10
Issue
3
Pages
63
ISSN
2227-9091 (ISSN-L)
DOI
10.3390/risks10030063
OpenAlex
W4220858958
Cited by
58
References
2
Citations by year
2026: 6 · 2025: 12 · 2024: 15 · 2023: 19 · 2022: 6
FWCI
23.57
Type
journal article
Language
en
Open access
Licence
Locations
  • Risks (publishedVersion, cc-by)
  • RePEc: Research Papers in Economics (submittedVersion)
  • DOAJ (DOAJ: Directory of Open Access Journals) (submittedVersion)
  • Econstor (Econstor) (submittedVersion, cc-by)
Topics
  • Social Sciences › Business, Management and Accounting › Accounting › Working Capital and Financial Performance
  • Social Sciences › Business, Management and Accounting › Management Information Systems › Supply Chain and Inventory Management
  • Social Sciences › Business, Management and Accounting › Accounting › Financial Analysis and Corporate Governance
Keywords
working capital management, financial performance, retail companies, average collection period, average payment period, cash conversion cycle, return on assets, return on equity, Johannesburg Stock Exchange listed firms

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