highly positive significant between current ratio and profitability with p-value = 0.0000. This is may cause by the having the lowest profitability, 3.1% compare to other sectors.
Furthermore, no significant relationship between debt ratio and profitability is found for Property. However, highly negative significant between debt ratio and profitability is found in sector Consumer Product and Trade/service. These shows the both sector have fully utilise the firm leverage to generate firm profit. The evident shows in Table 3 that the profit of Consumer Product and Trade/Service are higher than average.
It is probably of all sectors that not provide any significant relationship between sales growth and profitability thus results to insignificant relationship result for across industries. However, Plantation sector provide strong evident of a positive association between sales growth and profitability (p-value = 0.0143 & 0.0000 respectively for both regression).
CONCLUSION
Working capital management is important part in firm financial management decision. The ability of the firm to continuously operate in longer period is depends on how they deal with investment in working capital management. The optimal of working capital management is could be achieve by firm that manage the trade off between profitability and liquidity. The purpose of this study is to investigate the relationship between working capital management and firm profitability. Cash conversion cycle is used as measure of working capital management. Results of this study found that cash conversion cycle are significantly negative associated to the firm profitability. Thus, firm manger should concern on reduction of cash conversion period in purpose of creation shareholder wealth.
References 从外来民工学校看信息技术课堂
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