The relationship of working capital management and profitability of publicly-listed banking companies in the Philippines (2008-2012)

• Main Authors: Cheng, Bettina Francesca L., Enciso, Benigno P., Gleyo, Joshua Eric V.
• Format: text
• Language: English
• Published: Animo Repository 2014
• Subjects: Working capital; Corporations > Finance; Cash management; Business enterprises > Finance; Accounting
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/10850
• Institution: De La Salle University

This study is about the relationship between working capital management (WCM) and profitability of publicly-listed banking companies in the Philippines. Working capital management gives the idea of how efficient the current assets and current liabilities are handled by the company. Through this idea, the company will be able to make sound decisions that can eventually affect their profitability. To measure working capital management, the ratios used are debtor's collection period, creditor's payment period, cash conversion cycle, debt ratio, and cash flow to debt ratio. On the other hand, ratios used for profitability were net interest margin, net non-interest margin, net profit margin, return on assets, and return on working capital. These ratios are used to find the relationship between the two variables to arrive at a conclusion using different statistical tools. The study conducted had reached the conclusion that there is a significant relationship between all the variables used to represent working capital management and profitability of publicly-listed banking companies in the Philippines. This study has then proved to present significance for the management of the publicly-listed banking companies in the country, for the investors, and for the academe.