营运资本管理外文文献翻译.docx

营运资本管理外文文献翻译.docx

《营运资本管理外文文献翻译.docx》由会员分享，可在线阅读，更多相关《营运资本管理外文文献翻译.docx（13页珍藏版）》请在冰豆网上搜索。

营运资本管理外文文献翻译

文献信息：

文献标题：

ImpactofAggressiveWorkingCapitalManagementPolicyonFirms’Profitability（激进的营运资本管理政策对企业盈利能力的影响）

国外作者：

MianSajidNazir，TalatAfza

文献出处：

《TheIUPJournalofAppliedFinance》,2009,Vol.15,PP19-30

字数统计：

英文2669单词，14456字符；中文4407汉字

外文文献：

ImpactofAggressiveWorkingCapitalManagementPolicyonFirms’Profitability

Introduction

Thecorporatefinanceliteraturehastraditionallyfocusedonthestudyoflong-termfinancialdecisions,particularlyinvestments,capitalstructure,dividendsorcompanyvaluationdecisions.However,short-termassetsandliabilitiesareimportantcomponentsoftotalassetsandneedtobecarefullyanalyzed.Managementoftheseshort-termassetsandliabilitieswarrantsacarefulinvestigationsincetheworkingcapitalmanagementplaysanimportantroleinafirm’sprofitabilityandriskaswellasitsvalue（Smith,1980）.Efficientmanagementofworkingcapitalisafundamentalpartoftheoverallcorporatestrategyincreatingtheshareholders’value.Firmstrytokeepanoptimallevelofworkingcapitalthatmaximizestheirvalue（Deloof,2003;HoworthandWesthead,2003andAfzaandNazir,2007）.

Ingeneral,fromtheperspectiveofChiefFinancialOfficer（CFO）,workingcapitalmanagementisasimpleandstraightforwardconceptofensuringtheabilityoftheorganizationtofundthedifferencebetweentheshort-termassetsandshort-termliabilities（Harris,2005）.However,a‘Total’approachisdesiredasitcancoverallthecompany’sactivitiesrelatingtovendor,customerandproduct（Hall,2002）.Inpractice,workingcapitalmanagementhasbecomeoneofthemostimportantissuesintheorganizationswheremanyfinancialexecutivesarestrugglingtoidentifythebasicworkingcapitaldriversandanappropriatelevelofworkingcapital（Lamberson,1995）.Consequently,companiescanminimizeriskandimprovetheoverallperformancebyunderstandingtheroleanddriversofworkingcapitalmanagement.

Afirmmayadoptanaggressiveworkingcapitalmanagementpolicywithalowlevelofcurrentassetsasapercentageoftotalassets,oritmayalsobeusedforthefinancingdecisionsofthefirmintheformofhighlevelofcurrentliabilitiesasapercentageoftotalliabilities.Excessivelevelsofcurrentassetsmayhaveanegativeeffectonthefirm’sprofitability,whereasalowlevelofcurrentassetsmayleadtoalowerlevelofliquidityandstockouts,resultingindifficultiesinmaintainingsmoothoperations（VanHorneandWachowicz,2004）.

Themainobjectiveofworkingcapitalmanagementistomaintainanoptimalbalancebetweeneachoftheworkingcapitalcomponents.Businesssuccessheavilydependsonthefinancialexecutives’abilitytoeffectivelymanagereceivables,inventory,andpayables（FilbeckandKrueger,2005）.Firmscanreducetheirfinancingcostsand/orincreasethefundsavailableforexpansionprojectsbyminimizingtheamountofinvestmenttiedupincurrentassets.Mostofthefinancialmanagers’timeandeffortsareallocatedtowardsbringingnon-optimallevelsofcurrentassetsandliabilitiesbacktooptimallevels（Lamberson,1995）.Anoptimallevelofworkingcapitalwouldbetheoneinwhichabalanceisachievedbetweenriskandefficiency.Itrequirescontinuousmonitoringtomaintainproperlevelinvariouscomponentsofworkingcapital,i.e.,cashreceivables,inventoryandpayables,etc.

Ingeneral,currentassetsareconsideredasoneoftheimportantcomponentsoftotalassetsofafirm.Afirmmaybeabletoreducetheinvestmentinfixedassetsbyrentingorleasingplantandmachinery,whereasthesamepolicycannotbefollowedforthecomponentsofworkingcapital.Thehighlevelofcurrentassetsmayreducetheriskofliquidityassociatedwiththeopportunitycostoffundsthatmayhavebeeninvestedinlong-termassets.Thoughtheimpactofworkingcapitalpoliciesonprofitabilityishighlyimportant,onlyafewempiricalstudieshavebeencarriedouttoexaminethisrelationship.Thisstudyinvestigatesthepotentialrelationshipofaggressive/conservativepolicieswiththeaccountingandmarketmeasuresofprofitabilityofPakistanifirmsusingapaneldatasetfortheperiod1998-2005.Thepresentstudyisexpectedtocontributetobetterunderstandthesepoliciesandtheirimpactonprofitability,especiallyinemergingmarketslikePakistan.

ResearchMethodology

VariablesUsedintheStudy

ThisstudyusesaggressiveinvestmentpolicyasusedbyWeinraubandVisscher（1998）,whoanalyzedworkingcapitalpoliciesof126industrialfirmsintheUSmarket.AggressiveInvestmentPolicy（AIP）resultsinminimallevelofinvestmentincurrentassetsversusfixedassets.Incontrast,aconservativeinvestmentpolicyplacesagreaterproportionofcapitalinliquidassetswiththeopportunitycostoflessprofitability.Ifthelevelofcurrentassetsincreasesinproportiontothetotalassetsofthefirm,themanagementissaidtobemoreconservativeinmanagingthecurrentassetsofthefirm.Inordertomeasurethedegreeofaggressivenessofworkingcapitalinvestmentpolicy,thefollowingratiowasused:

wherealowerratiomeansarelativelyaggressivepolicy.

Ontheotherhand,anAggressiveFinancingPolicy（AFP）utilizeshigherlevelsofcurrentliabilitiesandlesslong-termdebt.Incontrast,aconservativefinancingpolicyusesmorelong-termdebtandcapitalandlesscurrentliabilities.Thefirmsaremoreaggressiveintermsofcurrentliabilitiesmanagementiftheyareconcentratingontheuseofmorecurrentliabilitieswhichputtheirliquidityonrisk.Thedegreeofaggressivenessofafinancingpolicyadoptedbyafirmismeasuredbyworkingcapitalfinancingpolicy,andthefollowingratioisused:

whereahigherratiomeansarelativelyaggressivepolicy.

Theimpactofworkingcapitalpoliciesontheprofitabilityhasbeenanalyzedthroughaccountingmeasuresofprofitabilityaswellasmarketmeasuresofprofitability,i.e.,ReturnonAssets（ROA）andTobin’sq.Thesevariablesofreturnarecalculatedas:

Tobin’sqcomparesthevalueofacompanygivenbyfinancialmarketswiththevalueofacompany’sassets.Alowq（between0and1）meansthatthecosttoreplaceafirm’sassetsisgreaterthanthevalueofitsstock.Thisimpliesthatthestockisundervalued.Conversely,ahighq（greaterthan1）impliesthatafirm’sstockismoreexpensivethanthereplacementcostofitsassets,whichimpliesthatthestockisovervalued.Itiscalculatedas:

whereMarketValueofFirm（MVF）isthesumofbookvalueoflongplusshorttermandmarketvalueofequity.Marketvalueofequityiscalculatedbymultiplyingthenumberofsharesoutstandingwiththecurrentmarketpriceofthestockinaparticularyear.

ControlVariables

Inworkingcapitalliterature,variousstudieshaveusedthecontrolvariablesalongwiththemainvariablesofworkingcapitalinordertohaveanappositeanalysisofworkingcapitalmanagementontheprofitabilityoffirms（Lamberson,1995;SmithandBegemann,1997;Deelof,2003;Eljelly,2004;TeruelandSolano,2005andLazaridisandTryfonidis,2006）.Onthesamelines,alongwithworkingcapitalvariables,thepresentstudyhastakenintoconsiderationsomecontrolvariablesrelatingtofirmssuchasthesizeofthefirm,thegrowthinitssales,anditsfinancialleverage.Thesizeofthefirm（SIZE）hasbeenmeasuredbythelogarithmofitstotalassets,astheoriginallargevalueoftotalassetsmaydisturbtheanalysis.Thegrowthoffirm（GROWTH）ismeasuredbyvariationinitsannualsalesvaluewithreferencetopreviousyear’ssales[（Salest–Salest–1）/Salest–1].Moreover,thefinancialleverage（LVRG）wastakenasthedebttoequityratioofeachfirmforthewholesampleperiod.Somestudies,likeDeloof（2003）inhisstudyoflargeBelgianfirms,alsoconsideredtheratiooffixedfinancialassetstototalassetsasacontrolvariable;however,thisvariablecannotbeincludedinthepresentstudybecauseofunavailabilityofdata,asmostofthefirmsdonotdisclosefullinformationintheirfinancialstatements.Finally,sincegoodeconomicconditionstendtobereflectedinafirm’sprofitability（Lamberson,1995）,thisphenomenonhasbeencontrolledfortheevolutionoftheeconomiccycleusingtheGDPGRvariable,whichmeasurestherealannualGDPgrowthinPakistanforeachofthestudyyearfrom1998to2005.

StatisticalAnalysis

Theimpactofaggressiveandconservativeworkingcapitalpoliciesontheprofitabilityofthefirmshasbeenevaluatedbyapplyingthepaneldataregressionanalysis.Theperformancevariables（ROAandTobin’sq）aswellastheTCA/TAandTCL/TAalongwiththecontrolvariableswereregressedusingtheSPSSsoftware.Thefollowingregressionequationsareruntoestimatetheimpactofworkingcapitalpoliciesontheprofitabilitymeasures.

where,

TCA/TA=Totalcurrentassetstototalassetsratio

TCL/TAi=Totalcurrentliabilitiestototalassetsratio

ROAi=Returnonassets

Tobin’sqi=Valueofq

SIZEi=Naturallogoffirmsize

GROWTHi=Growthofsales

LVRGi=Financialleverageoffirms

GDPGRi=RealAnnualGDPgrowthrateofPakistan

α=Intercept;and

ε=Errortermofthemodel

SampleandData

Thesampleofthestudyconsistsofallnon-financialfirmslistedontheKarachiStockExchange（KSE）.KSEhasdividedthenon-financialfirmsintovariousindustrialsectorsbasedontheirnatureofbusiness.Inordertobeincludedinthesample,afirmmustbeinbusinessforthewholestudyperiod.Also,firmsshouldneitherhavebeendelistedbytheKSEnormergedwithanyotherfirmduringthewholewindowperiod.Newincumbentsinthemarketduringthestudyperiodhavealsonotbeenincludedinthesample.Furthermore,firmsmusthavecompletedatafortheperiod1998-200