The Relationship between Cash Conversion Cycle and Financial Performance: Evidence from Firms Listed in the Stock Exchange of Thailand
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Abstract
To overcome competition in a very complex environment, only few companies have been able to utilize working capital management as a real competitive advantage in order to leverage profit. The objective of this research presented here was to provide empirical evidence about the effects of the cash conversation cycle (CCC) on the financial performance of a sample of 371 Thai companies listed in the Stock Exchange of Thailand. In this case, the financial performance was measured in three different ways including gross profit margin (GPM), return on asset (ROA) and return on equity (ROE). We collected a panel of 2,226 firms during the years covering the period of 2012-2017. From Random-effect model it was evident that the cash conversion cycle had a negative relationship with ROA and ROE but there was no relationship between the cash conversion cycle and gross profit margin. The research results reveal that managers can improve the firm’s profitability by shortening the cash conversion cycle.
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ลิขสิทธิ์ของบทความ
ผลงานที่ได้รับการตีพิมพ์ถือเป็นลิขสิทธิ์ของมหาวิทยาลัยหอการค้าไทย ห้ามมิให้นำเนื้อหา ทัศนะ หรือข้อคิดเห็นใด ๆ ของผลงานไปทำซ้ำ ดัดแปลง หรือเผยแพร่ ไม่ว่าทั้งหมดหรือบางส่วนโดยไม่ได้รับอนุญาตเป็นลายลักษณ์อักษรจากมหาวิทยาลัยหอการค้าไทยก่อน
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