• June 24, 2019

Financial institutions, banking, insurance, utility companies, renting and real-estate were excluded from the sample because of their specific nature of services. Variable choice In this paragraph the variables will be discussed individually and a table is given of the variable definitions. The level of WCM is measured with the cash conversion cycle. Also the positive effect of the current ratio is normal, because a good liquidity level is required by creditors such as suppliers. To be competitive, companies have to decrease their costs and this can be accomplished by keeping the costs of stocking inventory to a reasonable minimum Gaur et al.

This decline caused financial constraints for corporations all over the world, and this was also the case in The Netherlands. The most notable of these results is that they all show a positive significant sign. Lazaridis and Tryfonidis found even a stronger negative percentage, which is They found a negative relation between operating profitability and the number of days of inventories, account payables and account receivables for a sample of fifty Nigerian firms listed on the Nigerian Stock Exchange. Failure to pay within the discount period could signal financial distress and it would than merit to monitor the buyer more closely. Evidence is also found that when firms are able to access other cheaper financial resources, like bank loans, they use less trade credit substitution effect.

This study will also contribute by studying the management of working capital within The Netherlands, which is not done before by a reputable author, according to the searches I made using the databases available for student of the University of Twente.

excellent master thesis utwente

For example a regression analysis gives a coefficient of Upper Saddle River, NY: I therefore argue that future research should not study the combined evaluating measure of WCM, which is the CCC, but study accounts receivables, accounts payables and inventories individually.


This problem maeter that firms are not able to access financial resources from the capital market.

excellent master thesis utwente

In other words, the period between the acquiring of raw materials and the paying of these materials plus the cash conversion cycle forms the working capital cycle of a firm. They focussed on smaller firms who masteg a limited access to the capital market.

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Firms can maximize their value by having an optimal level of working capital Deloof, I am also very thankful to my parents for their excellet support and for all the given opportunities and encouragements, which enabled me to reach the goals in my live. The chapter ends with the discussion of the sample and the data sources. Journal of Operations Management, 29pp.

Leach and Melicher, The sale can be mastre by cash or by trade credit. A somewhat similar percentage is found by Deloofwho found The second chapter Literature Review gives an extensive literature study on working capital and the managements of its different parts.

Business and Economics Journal, Current liabilities Cash and other liabilities that have to be paid within one year.

Furthermore these periods are then compared and then determined, whether companies have to alter their management concerning their working capital management during times of a crisis. Corporate Finance European Edition. Rezaul Kabir and Dr. Thus, a firm with high liquidity of working capital will have low risk and therefore low profitability.

Boudewijn van den Berg | University of Twente –

London and Basingstoke, UK: In Appendix C a table can be found giving information of how each variable is measured. The profitability measures that will be used in this study is gross operating profit before depreciation and amortization divided by total assets minus financial assets, in this study this measurement is abbreviated to GOP.


excellent master thesis utwente

These differences can mainly be contributed to the difference in macro-economic conditions. A comparable masher of 44,48 days is found by Deloof Wang examined the relation between liquidity management and operating performance, and the between liquidity management and corporate value for firms in Japan and Taiwan.

The Quarterly Journal of Economics 2. Financial Management, 22 4pp.

Each regression equation, given earlier, and its corresponding table will be discussed in detail. Higher average results of 96,1 days, 97,8 and days was found by respectively Lazaridis and TryfonidisGarcia-Teruel and Martinez-Solano and Sharma and Kumar They found a negative relation between operating profitability and the number of days of inventories, account payables and account receivables for a sample of fifty Nigerian firms listed on the Nigerian Stock Exchange.

Bank Lending during the Financial Crisis of As can be seen in the table 2. Seminars and translating lecture notes. As larger firms increase their role as a financial intermediate during periods of a crisis, they sell more financial resources along with their products Meltzer, A Weighted Cash Conversion Cycle.