The Effect of Working Capital Management on Corporate Performance
운전자본관리가 기업성과에 미치는 영향

Hyung Kyu Kam, Yong Jae Shin
2016 Journal of the Korea Academia-Industrial cooperation Society  
This study examines the effect of firms' working capital management on their performance for a sample of non-financial companies listed on the Korea Exchange (KRX). The working capital and corporate performance are measured as the ratio of the net working capital to sales and return on assets, respectively. The results are as follows. First, there is no significant relationship between the working capital and corporate performance in the total sample. Second, the working capital is positively
more » ... tal is positively related to the firms' performance in the negative working capital group while the working capital is negatively related to the corporate performance in the positive working capital group. These findings indicate the existence of an optimal working capital level for firms. Third, the firms' financial constraints have no effects on the relationship between the working capital and corporate performance. This suggests that there are no interactive effects among the working capital, financial constraints, and profitability of the firms. This study implicates that managers should consider the different roles and impacts when developing an efficient working capital management strategy.
doi:10.5762/kais.2016.17.6.173 fatcat:pqzhysoi6za5ddmvrs66j2g5ym