Working capital management and profitability : evidence from Jordanian mining and extraction industry sector
Other Title(s)
إدارة رأس المال العامل و الربحية : دليل ميداني من قطاع الصناعات التعدينية و الاستخراجية في الأردن
Joint Authors
al-Shar, Ata Ilayyan Muhammad
al-Nayf, Khalid Lafi
Source
IUG Journal of Economics and Business Studies
Issue
Vol. 27, Issue 1 (31 Jan. 2019), pp.42-60, 19 p.
Publisher
The Islamic University-Gaza Deanship of Research and Graduate Affairs
Publication Date
2019-01-31
Country of Publication
Palestine (Gaza Strip)
No. of Pages
19
Main Subjects
Business Administration
Economy and Commerce
Topics
- Management
- Finance
- Profits
- Industries
- Metal industry
- Mining engineering
- Jordan
- Twenty-first century
- Corporations
- Working capital
Abstract EN
This paper sought to ascertain the existence of the relationship between the working capital management components )cash conversion cycle, receivables collection period, inventory conversion period, and the payment period) and corporate's profitability in the presence of two control variables (corporate's size and debt ratio), in the mining and extraction industry sector of the Jordanian economy.
The study sample consists of 9 ASE listed corporations in this sector over a period of 17 years from 2000 to 2016, resulting in 153 firm-year observations.
The study employed four model specifications in order to test the postulated hypotheses.
Pearson‟s correlation and Panel data methodology employed.
The results from the random effect model are prolific enough to depict that there is a strong negative relationship between the components of the working capital management and the corporate's profitability.
Similarly, there is a negative relationship between the debt ratio and the profitability of the firm.
Finally, a positive relationship is observed between the corporate's size and profitability.
The practical implications of this study are that the corporation manager in mining and extraction Industry Corporation must consider the importance of shortening length of working capital management and its components (especially inventory) to a minimum level in formulating their policies, in order to operate efficiently and effectively because the length of WCM is closely and significantly related to corporation profitability.
American Psychological Association (APA)
al-Nayf, Khalid Lafi& al-Shar, Ata Ilayyan Muhammad. 2019. Working capital management and profitability : evidence from Jordanian mining and extraction industry sector. IUG Journal of Economics and Business Studies،Vol. 27, no. 1, pp.42-60.
https://search.emarefa.net/detail/BIM-860998
Modern Language Association (MLA)
al-Nayf, Khalid Lafi& al-Shar, Ata Ilayyan Muhammad. Working capital management and profitability : evidence from Jordanian mining and extraction industry sector. IUG Journal of Economics and Business Studies Vol. 27, no. 1 (Jan. 2019), pp.42-60.
https://search.emarefa.net/detail/BIM-860998
American Medical Association (AMA)
al-Nayf, Khalid Lafi& al-Shar, Ata Ilayyan Muhammad. Working capital management and profitability : evidence from Jordanian mining and extraction industry sector. IUG Journal of Economics and Business Studies. 2019. Vol. 27, no. 1, pp.42-60.
https://search.emarefa.net/detail/BIM-860998
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references : p. 58-60
Record ID
BIM-860998