Shiv Shankar Kumar, Kumar Sanjay Sawarni, Subrata Roy, Naresh G
{"title":"营运资本效率对企业综合财务绩效的影响:来自印度的证据","authors":"Shiv Shankar Kumar, Kumar Sanjay Sawarni, Subrata Roy, Naresh G","doi":"10.1108/ijppm-07-2023-0374","DOIUrl":null,"url":null,"abstract":"<h3>Purpose</h3>\n<p>The objective of this paper is to investigate the effect of working capital efficiency (WCE) and its components on the composite financial performance of a sample of Indian firms.</p><!--/ Abstract__block -->\n<h3>Design/methodology/approach</h3>\n<p>Our sample includes 796 non-financial listed firms from 2015–16 to 2021–22. Sample firms’ profitability, liquidity, solvency, cash flow management, and financial and operational leverage have been used to classify them into companies with high composite financial performance (HCFP) and with low composite financial performance (LCFP) by using K-Means Clustering technique. A composite financial performance score (CFPS) of 1 has been assigned to HCFP and 0 to LCFP. We have used logistic regression models with fixed effect to estimate the effect of cash conversion cycle (CCC) and its components, i.e. inventory days, accounts receivable days and accounts payable days on CFPS in the presence of control variables such as growth, leverage, firm size, and age.</p><!--/ Abstract__block -->\n<h3>Findings</h3>\n<p>The study finds that CCC and inventory days are inversely associated with CFPS. This finding shows that the firms’ WCE leads to superior financial performance on a composite basis.</p><!--/ Abstract__block -->\n<h3>Research limitations/implications</h3>\n<p>The research findings are based on samples drawn from the population of the listed Indian non-financial companies. Since the operation, financial practices, working capital policies, and management styles of firms vary greatly among nations, the results of this study should be extended to firms in other countries after taking into account the degree of resemblance to the sample firms.</p><!--/ Abstract__block -->\n<h3>Practical implications</h3>\n<p>The findings of this study hold significant value for industry practitioners, as they provide guidance in determining the optimal allocation of funds for working capital and devising strategies for effectively managing inventory levels, credit sales, and vendor payments in order to increase the overall value of the company. This study aims to help investors in building their investment portfolios by identifying companies with superior composite financial performance. Investors can enhance the construction of their investment portfolios by strategically selecting companies that demonstrate superior overall performance.</p><!--/ Abstract__block -->\n<h3>Social implications</h3>\n<p>The results of our study will help companies improve their WCM strategies to enhance their overall value, and their significance increases manifold during economic downturns. Business firms that perform well by efficiently managing their working capital have a multiplier effect on the economy and society at large in the form of GDP contribution, labor income, taxes to the government, investment in capital assets, and payments to suppliers.</p><!--/ Abstract__block -->\n<h3>Originality/value</h3>\n<p>To understand the impact of WCE on firms’ performance, the extant working capital literature focuses on some specific characteristics such as profitability, valuation, solvency, and liquidity. The limitation of employing a single parameter is its inability to present the comprehensive performance evaluation of firms. This study is among the earliest studies that focus on the holistic evaluation of WCE's impact on the composite performance of a company.</p><!--/ Abstract__block -->","PeriodicalId":47944,"journal":{"name":"International Journal of Productivity and Performance Management","volume":null,"pages":null},"PeriodicalIF":3.6000,"publicationDate":"2024-04-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":"{\"title\":\"Influence of working capital efficiency on firm’s composite financial performance: evidence from India\",\"authors\":\"Shiv Shankar Kumar, Kumar Sanjay Sawarni, Subrata Roy, Naresh G\",\"doi\":\"10.1108/ijppm-07-2023-0374\",\"DOIUrl\":null,\"url\":null,\"abstract\":\"<h3>Purpose</h3>\\n<p>The objective of this paper is to investigate the effect of working capital efficiency (WCE) and its components on the composite financial performance of a sample of Indian firms.</p><!--/ Abstract__block -->\\n<h3>Design/methodology/approach</h3>\\n<p>Our sample includes 796 non-financial listed firms from 2015–16 to 2021–22. Sample firms’ profitability, liquidity, solvency, cash flow management, and financial and operational leverage have been used to classify them into companies with high composite financial performance (HCFP) and with low composite financial performance (LCFP) by using K-Means Clustering technique. A composite financial performance score (CFPS) of 1 has been assigned to HCFP and 0 to LCFP. We have used logistic regression models with fixed effect to estimate the effect of cash conversion cycle (CCC) and its components, i.e. inventory days, accounts receivable days and accounts payable days on CFPS in the presence of control variables such as growth, leverage, firm size, and age.</p><!--/ Abstract__block -->\\n<h3>Findings</h3>\\n<p>The study finds that CCC and inventory days are inversely associated with CFPS. This finding shows that the firms’ WCE leads to superior financial performance on a composite basis.</p><!--/ Abstract__block -->\\n<h3>Research limitations/implications</h3>\\n<p>The research findings are based on samples drawn from the population of the listed Indian non-financial companies. Since the operation, financial practices, working capital policies, and management styles of firms vary greatly among nations, the results of this study should be extended to firms in other countries after taking into account the degree of resemblance to the sample firms.</p><!--/ Abstract__block -->\\n<h3>Practical implications</h3>\\n<p>The findings of this study hold significant value for industry practitioners, as they provide guidance in determining the optimal allocation of funds for working capital and devising strategies for effectively managing inventory levels, credit sales, and vendor payments in order to increase the overall value of the company. This study aims to help investors in building their investment portfolios by identifying companies with superior composite financial performance. Investors can enhance the construction of their investment portfolios by strategically selecting companies that demonstrate superior overall performance.</p><!--/ Abstract__block -->\\n<h3>Social implications</h3>\\n<p>The results of our study will help companies improve their WCM strategies to enhance their overall value, and their significance increases manifold during economic downturns. 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Influence of working capital efficiency on firm’s composite financial performance: evidence from India
Purpose
The objective of this paper is to investigate the effect of working capital efficiency (WCE) and its components on the composite financial performance of a sample of Indian firms.
Design/methodology/approach
Our sample includes 796 non-financial listed firms from 2015–16 to 2021–22. Sample firms’ profitability, liquidity, solvency, cash flow management, and financial and operational leverage have been used to classify them into companies with high composite financial performance (HCFP) and with low composite financial performance (LCFP) by using K-Means Clustering technique. A composite financial performance score (CFPS) of 1 has been assigned to HCFP and 0 to LCFP. We have used logistic regression models with fixed effect to estimate the effect of cash conversion cycle (CCC) and its components, i.e. inventory days, accounts receivable days and accounts payable days on CFPS in the presence of control variables such as growth, leverage, firm size, and age.
Findings
The study finds that CCC and inventory days are inversely associated with CFPS. This finding shows that the firms’ WCE leads to superior financial performance on a composite basis.
Research limitations/implications
The research findings are based on samples drawn from the population of the listed Indian non-financial companies. Since the operation, financial practices, working capital policies, and management styles of firms vary greatly among nations, the results of this study should be extended to firms in other countries after taking into account the degree of resemblance to the sample firms.
Practical implications
The findings of this study hold significant value for industry practitioners, as they provide guidance in determining the optimal allocation of funds for working capital and devising strategies for effectively managing inventory levels, credit sales, and vendor payments in order to increase the overall value of the company. This study aims to help investors in building their investment portfolios by identifying companies with superior composite financial performance. Investors can enhance the construction of their investment portfolios by strategically selecting companies that demonstrate superior overall performance.
Social implications
The results of our study will help companies improve their WCM strategies to enhance their overall value, and their significance increases manifold during economic downturns. Business firms that perform well by efficiently managing their working capital have a multiplier effect on the economy and society at large in the form of GDP contribution, labor income, taxes to the government, investment in capital assets, and payments to suppliers.
Originality/value
To understand the impact of WCE on firms’ performance, the extant working capital literature focuses on some specific characteristics such as profitability, valuation, solvency, and liquidity. The limitation of employing a single parameter is its inability to present the comprehensive performance evaluation of firms. This study is among the earliest studies that focus on the holistic evaluation of WCE's impact on the composite performance of a company.
期刊介绍:
■Organisational design and methods ■Performance management ■Performance measurement tools and techniques ■Process analysis, engineering and re-engineering ■Quality and business excellence management Articles can address these topics theoretically or empirically through either a descriptive or critical approach. The co-Editors support articles that significantly bring new knowledge to the area both for academics and practitioners. The material for publication in IJPPM should be written in a manner which makes it accessible to its entire wide-ranging readership. Submissions of highly technical or mathematically-oriented papers are discouraged.