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An Assessment on Determinant of Working Capital Management from Malaysian Public Listed Companies

Author

Listed:
  • Nor Edi Azhar Binti Mohamad

    (Universiti Tenaga Nasional)

  • Siti Balqis Elias

    (Universiti Tenaga Nasional)

Abstract

This study investigates the practice of Working Capital Management (WCM) in Malaysian context, particularly in Malaysian public listed companies. Eventually, determining the important factors affecting working capital management would able managers to manage working capital efficiently and effectively. As for this purpose, a study of 150 public listed companies from 7 different sectors that were listed in Bursa Malaysia Main Market covering the period of 2002-2011 was undertaken. This study used cash conversion cycle (CCC) and working capital as a proxy for working capital requirement (WCR) while debt, capital expenditure, free cash flow, gross domestic product and firm growth are used as the determinant variables. In conclusions, applying correlations and Pooled Ordinary Least Square Regression analysis, the result shows that there are significant associations between working capital and its determinants factors.

Suggested Citation

  • 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.
    • Handle: RePEc:hur:ijaraf:v:3:y:2013:i:4:p:224-228
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    References listed on IDEAS

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    3. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    4. Aulia Fuad Rahman & Norman Mohd‐Saleh, 2008. "The Effect of Free Cash Flow Agency Problem on the Value Relevance of Earnings and Book Value," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 6(1), pages 75-90, January.
    5. Matthew D. Hill & G. Wayne Kelly & Michael J. Highfield, 2010. "Net Operating Working Capital Behavior: A First Look," Financial Management, Financial Management Association International, vol. 39(2), pages 783-805, June.
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    Cited by:

    1. Mohsin Siraj & Muhammad Mubeen & Salman Sarwat, 2019. "Working capital management and firm performance: evidence from non-financial firms in Pakistan," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 9(2), pages 27-37, February.
    2. Mubashir Qurashi & Muhammad Zahoor, 2017. "Working Capital Determinants for the UK Pharmaceutical Companies Listed on FTSE 350 Index," 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. 7(1), pages 11-17, January.
    3. 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.

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