Determinants of Working Capital Management Impacting on Profitability: Evidence from Agro and Food Industry in Stock Exchange of Thailand

Authors

  • Chosita Pestonji School of Management Technology, Suranaree University of Technology, Thailand
  • Sareeya Wichitsatian School of Management Technology, Suranaree University of Technology, Thailand

DOI:

https://doi.org/10.55766/OQPN5415

Keywords:

Working Capital Management, Profitability, Stock Exchange of Thailand

Abstract

This research is a quantitative study with an objective to 1) investigate the impacts of working capital on profitability and 2) develop and validate a structure equation model of working capital management and profitability. The main focus of this study included 43 agro and food industries in the Stock Exchange of Thailand. Secondary data for the past 3 years were analyzed using path analysis method. The results showed that 1) the model fitted the empirical data collected and 2) the company is able to increase its profitability by aiming at high liquidity in working capital management. In addition, shortening inventory conversion period and receivable collection period along with extending payable deferral period also help to gain higher profit.

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Published

2019-06-26

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Research Article