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The Relationship between Working Capital Management and Profitability: Evidence in Viet Nam

Author

Listed:
  • Le Toan
  • Ho Van Nhan
  • Le Nguyen Ngoc Anh
  • Le Quang Man

Abstract

This study is aimed at explaining relationship between working capital management and profitability with Vietnam empirical evidence. We selected a sample of 34 construction companies listed in the Vietnam stock exchange for the period of 2007 -2015. We found statistically significant negative relationship between the cash conversion cycle with profitability and also found statistically significant positive relationship between the debt ratio and the fixed financial assets ratio with construction companies’ profitability. The results have the special meaning to construction companies in which Vietnamese construction companies doing business in the Vietnamese economy have their own characteristics.

Suggested Citation

  • Le Toan & Ho Van Nhan & Le Nguyen Ngoc Anh & Le Quang Man, 2017. "The Relationship between Working Capital Management and Profitability: Evidence in Viet Nam," International Journal of Business and Management, Canadian Center of Science and Education, vol. 12(8), pages 175-175, July.
    • Handle: RePEc:ibn:ijbmjn:v:12:y:2017:i:8:p:175
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    References listed on IDEAS

    as
    1. Pedro Juan García‐Teruel & Pedro Martínez‐Solano, 2007. "Effects of working capital management on SME profitability," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 3(2), pages 164-177, April.
    2. Greg Filbeck & Thomas M. Krueger, 2005. "An Analysis of Working Capital Management Results Across Industries," American Journal of Business, Emerald Group Publishing, vol. 20(2), pages 11-20.
    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.
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    Cited by:

    1. Letshaba Sejake & John Beneke & Johannes G Maseko & Bouba Ismaila, 2024. "Effects of working capital management on the profitability of South African construction companies listed on the JSE," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 13(4), pages 252-264, June.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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