The impact of working capital management on profitability - a comparative analysis of German and Japanese automotive manufacturers

• Autor(a) principal: Hack, Leonard Klaus
• Data de Publicação: 2022
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10362/153992
• topic: Cash conversion cycle; Germany; Working capital management; Profitability; Days inventory outstanding; Days sales outstanding; Days payable outstanding; Covid-19 pandemic; Japan; Return on assets; Automotive manufacturers; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

This study investigates the impact of Working Capital Management (WCM) on profitability by analyzing six years of quarterly data of German and Japanese automotive manufacturers. Descriptive statistics and independent t-tests reveal significant country differences. Japanese companies follow a more aggressive WCM policy, expressed by a significantly lower Cash Conversion Cycle (CCC) and a higher Return on Assets (ROA) than German firms. The results of the correlation analysis and Ordinary Least Squares regressions stress the importance of WCM. Managers of automotive manufacturers can improve ROA by lowering CCC, Days Sales Outstanding, and the share of current assets on total assets.