Appeasing company owners through effective working capital management

Marttonen-Arola, Salla, Viskari, Sari and Kärri, Timo (2013) Appeasing company owners through effective working capital management. International Journal of Managerial and Financial Accounting, 5 (1). pp. 64-78. ISSN 1753-6715

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Abstract

In the dynamic financial climate of the present day, companies should be aware of the potential of effective working capital management in reacting to market transformations. It is important to include the company owner’s viewpoint in the research perspective. In this paper, we study the connection between working capital management and the return on equity. The managerial and financial perspectives of flexible asset management are integrated through analytical modelling. We conclude that the return on equity can be improved by shortening the cycle time of operational working capital. Both the interest rate of debt and the debt-to-equity ratio are taken into account in order to study the effects of dynamic financial conditions. Changes in the financial conditions could be compensated through effective management of working capital.

Item Type: Article
Subjects: Business and Management
Engineering
Divisions: Faculty of Engineering and Advanced Manufacturing
Depositing User: Salla Marttonen-Arola
Date Deposited: 17 Nov 2017 15:31
Last Modified: 17 Nov 2017 15:33
URI: http://sure.sunderland.ac.uk/id/eprint/8175

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