THE IMPACT OF CASH CONVERSION CYCLE ON THE PROFITABILITY OF FOOD AND BEVERAGE COMPANIES IN VIETNAM: COMMENTARY FROM QUANTITATIVE ANALYSIS
Open accessAbstract
This research paper focuses on examining the relationship between the cash conversion cycle (CCC) and the profitability of Food and Beverage (F&B) companies in Vietnam by utilizing quantitative models. Analyzing a sample of 23 companies in the period from 2015 to 2021, the study revealsthat a reduction in the CCC positively influences profitability, as measured by the return on assets (ROA) ratio. The study further dissects the impact of CCC’s components, including days payable outstanding (DPO), days inventory outstanding (DIO), and days sales outstanding (DSO), on profitability. Based on regression analysis results, the study recommends that companies under study endeavor to reduce the durations of DPO, DIO, DSO, and CCC to improve profitability. Implementing strategies to tighten credit policies and optimize capital utilization is suggested as a means to achieve this objective.
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[33, 35] established a negative correlation between CCC and profitability.
“contrary to [33, 35] who established a negative correlation between the two.”
From Exploring the Causal Effect of Cash Conversion Cycle Signals on Profitability of Tanzanian Manufacturing Firms (2024) · cites this paper as [33]
The Literature Review says a shorter cash conversion cycle can improve profitability, supporting the direction of the claimed relationship. The accessible non-abstract passages do not report this paper’s own results establishing a negative correlation, so the attribution of that finding to this study is not fully supported. (LLM, conf=0.72)
Experimental — accuracy not yet measuredThe reviewed literature presents mixed findings regarding the correlation of CCC components with profitability, showing either positive or negative relationships.
“Researches present mixed findings regarding the correlation of CCC components with profitability. The reviewed literature showed either positive relationship or negative relationship.”
From Exploring the Causal Effect of Cash Conversion Cycle Signals on Profitability of Tanzanian Manufacturing Firms (2024) · cites this paper as [33]
The Literature review (section 2) describes mixed findings for CCC as a whole, including both adverse and favorable relationships with profitability, and discusses DSO as one component. It does not clearly establish that the reviewed literature found both positive and negative relationships for CCC components specifically. (LLM, conf=0.78)
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Percentages, sums and reported differences re-computed from the paper’s own numbers.
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Cites
International Journal of Economics and Financial Issues
(2021) · International Journal of Economics and Financial Issues · doi:10.32479/ijefi · Cited by 2,008 · see citing works
Does Working Capital Management Affect Profitability of Belgian Firms?
Deloof, M. (2003) · Journal of Business Finance & Accounting · doi:10.1111/1468-5957.00008 · Cited by 1,849 · see citing works
The impact of cash conversion cycle on firm profitability: An empirical study based on Swedish data
Yazdanfar, D., & Öhman, P. (2014) · International Journal of Managerial Finance · doi:10.1108/ijmf-12-2013-0137 · Cited by 157 · see citing works
Anser, R. A. R. (2013) · IOSR Journal of Business and Management · doi:10.9790/487x-0828387 · Cited by 59 · see citing works
Zakari, M. (2016) · Journal of Finance and Accounting · doi:10.11648/j.jfa.20160406.15 · Cited by 37 · see citing works
An Optimal Cash Conversion CyclePreprint
Nobanee, H., & Hajjar, M. A. (2014) · SSRN Electronic Journal · Cited by 32 · see citing works
Flagged first, then by citations
1 of the 7 references couldn’t be matched to a known paper.
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Tago, G., & Sumawe, S. (2024) · International Journal of Economics, Finance and Management Sciences · doi:10.11648/j.ijefm.20241205.19
Văn, H. V., & Quang, T. T. (2025) · Tạp chí Khoa học Thương mại · doi:10.54404/jts.2025.202v.08
- Authors
- Foreign Trade University, H., Tran Khoi Nguyen, L., Duc Anh, N., Foreign Trade University, H., Nhat Hoang, L., Foreign Trade University, H., Ngoc Khanh, T., Foreign Trade University, H., Phuong Thao, P., & University of Economics and Business - Vietnam National University, H.
- Venue
- Vinh University Journal of Science
- Publisher
- Vinh University
- Published
- 2024-03-20
- Volume
- 53
- Issue
- 1B
- Pages
- 5-18
- ISSN
- 1859-2228 (ISSN-L)
- OpenAlex
- W4393009436
- Cited by
- 2
- References
- 7
- Citations by year
- 2025: 1 · 2024: 1
- FWCI
- 1.99
- Type
- journal article
- Language
- en
- Open access
- diamond
- doi.org
- Licence
- cc-by-nc
- Locations
- Vinh University Journal of Science (publishedVersion, cc-by-nc)
- DOAJ (DOAJ: Directory of Open Access Journals) (submittedVersion)
- 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
- cash conversion cycle, profitability, food and beverage companies, return on assets, days payable outstanding, days inventory outstanding, days sales outstanding, credit policy, capital utilization
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