Title: How the working capital management influences companies' profitability: case study of Greek pharmaceutical companies

Authors: Dimitris Axiotis; Alina Hyz; Petros Kalantonis

Addresses: Piraeus University of Applied Sciences, Thivon 250, Egaleo 122 41, Greece ' Piraeus University of Applied Sciences, Thivon 250, Egaleo 122 41, Greece ' Piraeus University of Applied Sciences, Thivon 250, Egaleo 122 41, Greece

Abstract: This study examines the relationship between working capital management and firm's profitability for the period before and after last economic crisis in Greece. We use as a sample Greek pharmaceutical industry. We examine as a dependent variable return on assets ratio, as explanatory variables: cash conversion cycle, days inventory outstanding, days sales outstanding and days payables outstanding and as control variables: firm's growth, leverage and firm's size. The results, based on the implementation of descriptive statistics, Pearson's correlation and regression analysis show: 1) positive relationship between profitability and cash conversion cycle, firm's size, growth and leverage; 2) negative relationship between profitability and components of cash conversion cycle. The impact of economic crisis on these relationships is also analysed.

Keywords: working capital; profitability; crisis; Greece; pharmaceutical industry.

DOI: 10.1504/IJESB.2019.10023238

International Journal of Entrepreneurship and Small Business, 2019 Vol.37 No.4, pp.530 - 544

Received: 11 Mar 2017
Accepted: 28 Jun 2017

Published online: 22 Aug 2019 *

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