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Working Capital Management and Return on Assets of Manufacturing Industry of Peru

Author

Listed:
  • Wagner Enoc Vicente-Ramos
  • Marianela Roxana Ames Porras
  • Roberson Meza Quispe
  • Miguel Angel Rojas Zacarias

Abstract

This article contributes to the increase in knowledge and existing theory about the administration of working capital and its relation to profitability. Using a sample of 23 companies listed on the Lima stock exchange during the period 2009-2018. There is a negative relationship between profitability (ROA) and the average inventory period (PPI), in the same way a negative relationship between profitability and the average collection period (PPC), finally a positive relationship between profitability and the period average payment (PPP). It is concluded that a company of the industrial sector in Peru, manages to be more efficient, effective and competitive insofar as it improves the management of working capital, which is achieved if it achieves effective management of financial resources, an equitable policy of Customer credit, proper inventory management and proper management of supplier leverage and short term.

Suggested Citation

  • Wagner Enoc Vicente-Ramos & Marianela Roxana Ames Porras & Roberson Meza Quispe & Miguel Angel Rojas Zacarias, 2020. "Working Capital Management and Return on Assets of Manufacturing Industry of Peru," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(2), pages 382-389, April.
    • Handle: RePEc:jfr:ijfr11:v:11:y:2020:i:2:p:382-389
    DOI: 10.5430/ijfr.v11n2p382
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    References listed on IDEAS

    as
    1. 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.
    2. Ilhan Dalci & Cem Tanova & Hasan Ozyapici & Murad A. Bein, 2019. "The Moderating Impact of Firm Size on the Relationship between Working Capital Management and Profitability," Prague Economic Papers, Prague University of Economics and Business, vol. 2019(3), pages 296-312.
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