Exploring the Relationship between Working Capital Management, Profitability and Capital Structure
Objective – This paper explores the relationship between working capital management (WCM), profitability and capital structure. A preliminary framework provides an understanding of the role of WCM components with capital structure and profitability. Methodology/Technique – From the review of empir...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Global Academy of Training & Research (GATR) Enterprise
2017
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| Subjects: | |
| Online Access: | http://umpir.ump.edu.my/id/eprint/15403/ http://umpir.ump.edu.my/id/eprint/15403/1/fim-2017-riduan-Exploring%20the%20Relationship1.pdf |
| _version_ | 1848819946620977152 |
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| author | Abdussalam, Abdalla Geth Mohd Ridzuan, Darun |
| author_facet | Abdussalam, Abdalla Geth Mohd Ridzuan, Darun |
| author_sort | Abdussalam, Abdalla Geth |
| building | UMP Institutional Repository |
| collection | Online Access |
| description | Objective – This paper explores the relationship between working capital management (WCM), profitability and capital
structure. A preliminary framework provides an understanding of the role of WCM components with capital structure and
profitability. Methodology/Technique – From the review of empirical studies it is confirmed that WCM is a main component in the financial aspects of the firms as even though WCM is targeted for the short-term decisions it has effect on the firm for the long-run. Findings – Companies need to use working capital policy and procedures in order to navigate performance. Emphasizing on WCM would lead to formal cost controls and performance together with firm’s growth and productivity. The framework is set to help financial manager of the firms to balance the costs and benefits of debt and equity and reduce common obstacles on managing cash flows for long-term fixed investment. Novelty – The preliminary framework is original and unique that will contribute towards the enrichment of relevant literature. Practically, this study contributes to provide a better understanding of the managers and enable them to apply WCM strategies and make sure the firm is able to meet the stakeholder requirements. |
| first_indexed | 2025-11-15T02:01:38Z |
| format | Article |
| id | ump-15403 |
| institution | Universiti Malaysia Pahang |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T02:01:38Z |
| publishDate | 2017 |
| publisher | Global Academy of Training & Research (GATR) Enterprise |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | ump-154032017-03-13T05:39:05Z http://umpir.ump.edu.my/id/eprint/15403/ Exploring the Relationship between Working Capital Management, Profitability and Capital Structure Abdussalam, Abdalla Geth Mohd Ridzuan, Darun HF Commerce Objective – This paper explores the relationship between working capital management (WCM), profitability and capital structure. A preliminary framework provides an understanding of the role of WCM components with capital structure and profitability. Methodology/Technique – From the review of empirical studies it is confirmed that WCM is a main component in the financial aspects of the firms as even though WCM is targeted for the short-term decisions it has effect on the firm for the long-run. Findings – Companies need to use working capital policy and procedures in order to navigate performance. Emphasizing on WCM would lead to formal cost controls and performance together with firm’s growth and productivity. The framework is set to help financial manager of the firms to balance the costs and benefits of debt and equity and reduce common obstacles on managing cash flows for long-term fixed investment. Novelty – The preliminary framework is original and unique that will contribute towards the enrichment of relevant literature. Practically, this study contributes to provide a better understanding of the managers and enable them to apply WCM strategies and make sure the firm is able to meet the stakeholder requirements. Global Academy of Training & Research (GATR) Enterprise 2017 Article PeerReviewed application/pdf en http://umpir.ump.edu.my/id/eprint/15403/1/fim-2017-riduan-Exploring%20the%20Relationship1.pdf Abdussalam, Abdalla Geth and Mohd Ridzuan, Darun (2017) Exploring the Relationship between Working Capital Management, Profitability and Capital Structure. Accounting and Finance Review, 2 (1). pp. 38-45. ISSN 0128-2611. (Published) http://www.gatrenterprise.com/GATRJournals/afr_vol2_2017_issue1.html |
| spellingShingle | HF Commerce Abdussalam, Abdalla Geth Mohd Ridzuan, Darun Exploring the Relationship between Working Capital Management, Profitability and Capital Structure |
| title | Exploring the Relationship between Working Capital Management, Profitability and Capital Structure |
| title_full | Exploring the Relationship between Working Capital Management, Profitability and Capital Structure |
| title_fullStr | Exploring the Relationship between Working Capital Management, Profitability and Capital Structure |
| title_full_unstemmed | Exploring the Relationship between Working Capital Management, Profitability and Capital Structure |
| title_short | Exploring the Relationship between Working Capital Management, Profitability and Capital Structure |
| title_sort | exploring the relationship between working capital management, profitability and capital structure |
| topic | HF Commerce |
| url | http://umpir.ump.edu.my/id/eprint/15403/ http://umpir.ump.edu.my/id/eprint/15403/ http://umpir.ump.edu.my/id/eprint/15403/1/fim-2017-riduan-Exploring%20the%20Relationship1.pdf |