留学生Essay写作—营运资金管理及盈利能力.docx

留学生论文专业定制代写网站留学生Essay写作—营运资金管理及盈利能力Working capital management(WCM)refers to management of a firm’s current assets and current liabilities,which is also a primary function that support firm daily operation such as used to funds its stock,credit sales, and credit purchases.The management of working capital is important in order to maintain its liquidity in day-to-day operation;to ensure it operation is running smoothly and meets its obligation(Eljelly,2004).A firm without sufficient cash flow will have difficulties to survive in the future as it will be unable to pay its obligations.Therefore,if a firm does not manage their liquidity position well,it will affect firm’s growth,survival and profitability(Shafii,2010).The trade-off between profitability and liquidity are essential,however most of the firm’s ultimate objective is to maximise profit,while disregarding the dilemma of liquidity.One objective should not be cost of the other because both of them have their important(Raheman&Nasr, 2007). Jose et al.(1996)also point out this fact saying‘firms with glowing long term prospects and healthy bottom lines do not remain solvent without good liquidity management’.For these reason WCM should be given proper consideration.However,the management of working capital is complex as it needs to manage a number of different components which are inter-linked to each others.The management needs to concern on account receivables, account payables,inventories and cash,as altering one component will affect the others.Therefore,firms need to identify the optimal level of working capital that can maximise firm’s value(Afza and Nazir,2007). According to Ganesan(2007),optimization of working capital means minimisation of related costs and maximisation of related income. Efficient WCM will increase firms’free cash flow,which in turn increases the firms’growth opportunities and return to shareholders.Consequently, efficient WCM is crucial in order to maintaining firms’survival, liquidity,solvency and profitability.Thus,WCM has enormous influence to firm’s performance.Research Question–‘Does the past evidence showing a relationship between WCM and profitability hold true in Malaysian Listed Companies- manufacturing and services industries.’1.2 AIMThe aim of this study is to provide empirical evidence of the relationship between WCM and profitability in a sample of Malaysian listed companies by looking at the manufacturing and services industries.The cash conversion cycle(CCC)will be the indicator of firm’s liquidity which is a comprehensive measure,so that able to identify the most important variable that will affect CCC for two different industries.1.3 OBJECTIVES OF THIS STUDYExamine the relationship between the CCC and firm profitability.Examine the relationship between CCC components which are account receivables,account payable and inventory turnover period with firm’s profitability.Investigate whether the two industries have the same effect on the relations.1.4 RATIONAL OF THIS STUDYExtensive empirical research on WCM has been carried out around the world widely and those researches had given different results on the relationship between WCM and profitability.As the studies on the data undertake from Ernst&Young,2010 reveals that WCM vary across different industries.The study also gives significant evidence that different firms or sectors adopt different approaches to WCM.So,different firms will use different approaches and strategy to manage their working capital,such as those firms that is less competitive will choose to minimise their receivable in order to increase their cash flow.While for those firms that depends on supplier will maximise their payable account.Therefore,the impact of various working capital mechanisms on firm’s performance from Malaysia perspective might be different due to divergence business environment and culture between other countries.Besides that,there are few factors that may influence firm working capital such as nature of business,production policy,production cycle,credit policy,and availability of supply(Rama,2009).Nature of BusinessThe nature of business between different industries or firms is different. Thus,working capital requirement needed,also different among different industries or firm.For example,manufacturing is the productions of the product where the inventory can be keep in the warehouse.While services are the services provided to customer which cannot be stored.It also does not have investment in either raw materials,work in progress(WIP)or finished goods.Besides that,it also involves in immediate realization of cash after the services are provided,which means there will be less accounts receivables is exists.In here,it can be believed that services will have lower working capital requirement.[low wc,more risk n return]This is further proven by John Louie RamosProduction PolicyThe manage。