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The effect of company characteristics on working capital management: A quantitative study of Swedish listed companies
Umeå University, Faculty of Social Sciences, Umeå School of Business.
Umeå University, Faculty of Social Sciences, Umeå School of Business.
2010 (English)Independent thesis Advanced level (degree of Master (Two Years)), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

This study investigates the effect of company characteristics on the working capital management. We employed quantitative method to examine the relationship between company characteristics and the cash conversion cycle as a measure of working capital management in Swedish listed companies. The company characteristics include profitability, operating cash flow, company size, sale growth, current ratio and debt ratio. The sample consists of 40 companies in the large cap investment segment listed on NASDAQ OMX Stockholm Exchange. Financial data are extracted from companies’ annual reports of year 2007 and 2008 in order to calculate financial ratios used in the study.

 

Using regression analysis, our results indicate that profitability, operating cash flow, company size and sale growth affect the company’s working capital management. First, we find that there is a significant positive association between profitability and the cash conversion cycle. Second, we find that the cash conversion cycle have significant negative relationship with operating cash flow, company size and sale growth. Further, we examined the industry effect and find significant positive relations with the cash conversion cycle in four industry classifications as follows: materials, industrials, health care and information technology.

Place, publisher, year, edition, pages
2010. , 63 p.
Keyword [en]
Working capital management, cash conversion cycle
National Category
Business Administration
Identifiers
URN: urn:nbn:se:umu:diva-35674OAI: oai:DiVA.org:umu-35674DiVA: diva2:346166
Uppsok
Social and Behavioural Science, Law
Supervisors
Examiners
Available from: 2010-09-09 Created: 2010-08-31 Last updated: 2010-09-09Bibliographically approved

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf