Wang-Tzu Lin

Affiliation: Msc. in Risk Management, Glasgow Caledonian University, UK; Doctoral Student in College of Finance and Banking of National Kaohsiung First University of Science and Technology, Associated Vice President of Qisda Corporation, Taiwan
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  • Relationship of cash conversion cycle and PRGap with firm performance: an empirical study of Taiwanese companies

    Wang-Tzu Lin , Min-Sun Horng , Jian-Hsin Chou doi: http://dx.doi.org/10.21511/imfi.13(3-2).2016.01
    Investment Management and Financial Innovations Volume 13, 2016         Issue #3 (cont. 2)         pp. 293-299
    Views: 1167 Downloads: 818 TO CITE

    The study investigates how working capital management (WCM) impacts the profitability and operating performance of publicly traded companies in Republic of China, Taiwan. The authors use the quarterly data of 539 stocks listed on the Stock Exchange of Taiwan from 2008 to 2015, containing 17,248 observations. The study examines whether two WCM variables, namely, the cash conversion cycle (CCC), as well as the gap between days of payables outstanding and days of sales outstanding (PRGap) have any significant effects on firm profitability and operating performance. The findings demonstrate that there are significantly negative relationships between the CCC and performance indicators, whereas there are consistent positive relationships between PRGap and performance indicators.

    Keywords: working capital management, performance, cash conversion cycle, PRGap, Tobin’s Q.
    JEL Classification: G30, G31, G32, M10

Investment Management and Financial Innovations
Business, Management and Accounting Decision Sciences Economics, Econometrics and Finance

Investment Management and Financial Innovations

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