• Takerngsak Chaichan มหาวิทยาลัยเทคโนโลยีสุรนารี
Keywords: Working Capital Management, Working Capital Policy, Profitability, Industrials


Working capital management plays an important role in determining the success or failure of a business due to its impact on profitability. Therefore, financial executives should consider the appropriate working capital policy for the company in order to increase its profitability. This research investigates the impacts of working capital policy on firm’s profitability. Data is gathered from 115 companies, listed in industrials sector in Thailand. There are 82 companies in the stock exchange of Thailand (SET) and 33 companies in the market for alternative investment (mai) covering industrial sector. Data collected from 2013 to 2017 are analyzed by using regression analysis to evaluate the impacts of working capital policy on profitability.

            The independent variable in this study is the working capital policy which is consisted of working capital investment policy and financing policy. Investment policy is measured by total current assets to total assets ratio. Financing policy is measured by total current liabilities to total assets ratio. In this study, returning on assets ratio is the proxy of profitability. The result reveals a statistically significant positive relationship between working capital investment policy and profitability. However, there is significant negative impact of working capital financing policy on profitability. Overall, it can be implied that companies, which adopt conservative working capital investment policy and conservative working capital financing policy can increase their profitability.


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