TITLE

The Determinants of Effective Working Capital Management Policy: A Case Study on Jordan

AUTHOR(S)
AL Taleb, Ghassan; AL- Zoued, Abd; AL- Zoued, Naser; AL- Shubiri, Faris Nasif
PUB. DATE
August 2010
SOURCE
Interdisciplinary Journal of Contemporary Research in Business;Aug2010, Vol. 2 Issue 4, p248
SOURCE TYPE
Academic Journal
DOC. TYPE
Case Study
ABSTRACT
The managements adopts in measuring current assets and liabilities affects estimate of the optimal level of working capital is determined to a large extent by the methods adopted for the management of current assets and liabilities. The optimal level requires continuous management to maintain proper level in various components of working capital that is cash receivables, inventory and payables. This study uses 82 industrial firms from listed at Amman Stock Exchange (ASE) for a period of 2005-2007. The working capital requirement are the dependant variable whereas various financial and economical factors have been used as the antecedents of working capital management like operating cycle of firm, level of economic activity, leverage, growth of firm, operating cash flows, firm size, return on assets and Tobin's q. From the simple and multiple regression analysis used. it was indicate a statistical significant relationship between the working capital and operating cash flow deflated b y total assets, Sales Growth, Return on assets, Tobin's q and leverage in most period of the study and results show a statistical significant relationship between all independent variables and working capital at every year and all period years of the study. The study suggests some policy implications for the managers and investors of Jordanian markets. The evidence appears to emphasize the role of board monitoring of management and management's compensation in its control of the firm's working capital.
ACCESSION #
58737246

 

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