Title: Impact of working capital management on firm value: an empirical examination of firms listed on the Bombay Stock Exchange in India

Authors: Nabil Ahmed Mareai Senan; Mamdouh Abdulaziz Saleh Al-Faryan; Suhaib Anagreh; Eissa A. Al-Homaidi; Mosab I. Tabash

Addresses: Department of Accounting, College of Business Administration, Prince Sattam bin Abdul Aziz University, Kingdom of Saudi Arabia; Administrative Science College, Albaydha University, Yemen ' Department of Accounting and Financial Management, Faculty of Business and Law, University of Portsmouth, UK; Consultant in Economics and Finance, Riyadh, Saudi Arabia ' Higher Colleges of Technology, Abu Dhabi, United Arab Emirates ' Faculty of Business, Al-Rowad University, Taiz, Yemen ' College of Business, Al Ain University, UAE

Abstract: This study examines the impact of working capital management on firm value of 2,326 Indian firms listed in the Bombay Stock Exchange (BSE). This study used pooled, fixed and random, and generalised method of moments (GMM) model effect models. Firm value of Indian firms is measured by Tobin-Q is used as a dependent variable, while networking capital, size firm, financial leverage, current ratio, quick ratio, sales growth, annual real GDP and inflation rate are used as independent variables. The results of the current study indicated that firm size, financial leverage, current ratio and quick ratio are the most important factors that affecting firm value of Indian listed firms. The results also revealed that firm size, financial leverage and quick ratio have a negative and significant influence on firm value, except net working capital has a positive and significant effect on firm value. Sales growth, annual real GDP and inflation rate have a positive and insignificant influence on firm value of Indian listed firms during the period of the study.

Keywords: firm value; net working capital; working capital; panel data; listed firm; India.

DOI: 10.1504/IJMFA.2022.122227

International Journal of Managerial and Financial Accounting, 2022 Vol.14 No.2, pp.138 - 156

Received: 25 Aug 2021
Accepted: 27 Nov 2021

Published online: 12 Apr 2022 *

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