Working Capital Management and Firm Profitability: Evidence from Industry Products and Services Enterprises Listed on the Vietnam Stock Market

Abstract

The purpose of this study is to find out the effect of working capital management on company profitability. In light of this objective the study adopts quantitative approaches to test a series of research hypotheses. A sample of 86 industry products and services enterprises listed on the Vietnam stock market was used for a period from 2009 to 2019 with the total of 946 observations. The findings of the study showed that, there exists a highly significant negative relationship between average collection period and profitability indicating that a decrease in the number of days a firm receives payment from sales affects the profitability of the firm positively. This study will provide a general agenda to researchers, strategy makers, investors and professionals to guide future researches.

Keywords: Working Capital, Profitability, Vietnam

DOI: 10.7176/EJBM/12-27-12

Publication date:September 30^th 2020