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shows percentage of accounts receivable to total assets. Accounts receivable increased from 45.9% in 2019 to 58.1% in 2020.The increase in receivable can be attributed to the delayed payments by debtors, a sign of inefficiency in accounts receivables management specifically in collection efforts.
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This research study was carried out to analyse the impact of Covid-19 Lockdown towards working capital management and profitability of companies. The main complications faced were loss of market whilst operational costs remained on the same level. Enforcement of lockdown regulations such as curfews and intercity travel bans posed a threat in profit...
Context in source publication
Context 1
... section tries to analyze the position of accounts receivable as compared to other current assets of the company. Table 3 shows the volume of accounts receivable as a component of other current assets. . This increase was due to the fact that the company gave much credit to clients and recovery was not effective due to the sudden covid-19 pandemic. ...Citations
... Akbar et al. [12] proved that CCC is positively associated with ROE during global crisis. Using a case study, Wadesango et al. [63] argued that the sample experienced poor WCM practices because of the COVID-19, thus reducing firm profitability. Demiraj et al. [30] pointed out that CCC has a negative influence on ROA in the automotive sector before and during COVID-19. ...
The objective of this study is to explore the impact of working capital management on firms’ financial performance in China’s agri-food sector from 2006 to 2021. In addition, we analyze whether this impact is the same during the 2008 financial crisis and the 2020 COVID-19 crisis. Working capital management is measured by working capital investment policy (measured by current assets to total assets ratio), working capital financing policy (measured by current liabilities to total assets ratio), cash conversion cycle, and net working capital ratio. The results reveal that current assets to total assets ratio and net working capital ratio positively influence financial performance measured through return on assets (ROA), while current liabilities to total assets ratio and cash conversion cycle negatively influence ROA. We also find that the relationship between working capital management and financial performance is more affected during COVID-19 than in the 2008 financial crisis. The findings might provide important implications for company managers to make optimal working capital management practices, depending on the economic environment.
The present study aims to investigate the impact of the COVID-19 crisis and firm risk on working capital management policies among manufacturing firms listed on the Tehran Stock Exchange (TSE). The study sample consists of 1200 observations and 200 companies listed on the TSE over a six-year period from 2016 to 2021; furthermore, the statistical method used to test the hypotheses is ordinary least squares (OLS). The results show that the COVID-19 pandemic has led managers to increase current assets to total assets ratio (CATAR), current ratio (CR), quick ratio (QR), net working capital (NWC), cash to current assets (CTCA) ratio, while it has caused a decrease in operational cycle (OC), days account receivables (DAR), and current liabilities to total assets ratio (CLTAR). Furthermore, we find that the higher the company’s risk, the more managers are motivated to embrace the working capital investment policy, net working capital, cash to current assets ratio, and cash conversion efficiency (CCE). In general, our findings indicate that during times of crisis, Iranian companies tend to adopt conservative working capital policies to ensure sufficient liquidity to respond appropriately to unforeseen events. In this study, the theory of liquidity preference aligns with the observed behavior of firms in response to the COVID-19 crisis and firm risk, where the emphasis on liquidity and short-term financial stability becomes paramount.
