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The Effect of Working Capital Management Efficiency on the Operating Performance of the Industrial Companies in Oman

Author

Listed:
  • Syed Ahsan Jamil

    (Department of Accounting and Finance, Dhofar University, Salalah, Sultanate of Oman)

  • Mawih Kareem Al Ani

    (Department of Accounting and Finance, Dhofar University, Salalah, Sultanate of Oman,)

  • Faris Nasif Al Shubiri

    (Department of Accounting and Finance, Dhofar University, Salalah, Sultanate of Oman)

Abstract

The aim of this study is to examine the effect of working capital (WC) management efficiency on the operating performance of industrial companies listed in the Muscat Securities Exchange (MSM) in Sultanate of Oman. The study employed an explanatory non-experimental research design. 37 out of 48 industrial companies listed in the MSM were taken. The study used the data contained in the annual reports of these companies for the period 2009-2013. The WC management efficiency is measured WC ratios such as cash conversion cycle, current ratio, current assets turnover, net WC ratio (NWCR), while the operation performance is measured by net operating profit (NOP) and earnings before interest and tax. The regression results revealed that the first model is significant and there are only cash conversion cycle and NWCR have impact on the NOP, but the second model is insignifican

Suggested Citation

  • Syed Ahsan Jamil & Mawih Kareem Al Ani & Faris Nasif Al Shubiri, 2015. "The Effect of Working Capital Management Efficiency on the Operating Performance of the Industrial Companies in Oman," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 897-904.
    • Handle: RePEc:eco:journ1:2015-04-08
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    References listed on IDEAS

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    1. Gamze VURAL & Ahmet G khan S KMEN & Emin H seyin CETENAK, 2012. "Affects of Working Capital Management on Firm's Performance: Evidence from Turkey," International Journal of Economics and Financial Issues, Econjournals, vol. 2(4), pages 488-495.
    2. Michael Nwidobie Barine, 2012. "Working capital management efficiency and corporate profitability: Evidences from quoted firms in Nigeria," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 2(2), pages 1-8.
    3. Marc Deloof, 2003. "Does Working Capital Management Affect Profitability of Belgian Firms?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30(3‐4), pages 573-588, April.
    4. Marc Deloof, 2003. "Does Working Capital Management Affect Profitability of Belgian Firms?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30(3-4), pages 573-588.
    5. Azhagaiah Ramachandran & Muralidharan Janakiraman, 2009. "The Relationship between Working Capital Management Efficiency and EBIT," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 7(1), pages 61-74.
    6. Nor Edi Azhar Binti Mohamad & Siti Balqis Elias, 2013. "An Assessment on Determinant of Working Capital Management from Malaysian Public Listed Companies," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 3(4), pages 224-228, October.
    7. Kesseven Padachi & Carole Howorth & M. S. Narasimhan, 2012. "Working Capital Financing Preferences: The Case of Mauritian Manufacturing Small and Medium Sized Enterprises (SMEs)," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 8(1), pages 125-157.
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    Cited by:

    1. Tarek Ibrahim Eldomiaty & Mohamed Hashem Rashwan & Mohamed Bahaa El Din & Waleed Tayel, 2016. "Firm, industry and economic determinants of working capital at risk," International Journal of Financial Engineering (IJFE), World Scientific Publishing Co. Pte. Ltd., vol. 3(04), pages 1-29, December.
    2. Faris Nasif Al Shubiri & Syed Ahsan Jamil, 2017. "Assessing the Determinants of Interest Rate Spread of Commercial Banks in Oman: An Empirical Investigation," European Research Studies Journal, European Research Studies Journal, vol. 0(2A), pages 90-108.

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    More about this item

    Keywords

    Working Capital Management Efficiency; Operating Performance; Working Capital Ratios;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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