Cash Management Strategies to Increase Profitability in the Technology Industry
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Abstract
This research aimed to study the impact of receivables collection period, inventory conversion period, and payable deferral period on the cash conversion cycle. In addition, this research is to investigate the impact of cash conversion cycle on profitability. The study is based on secondary financial data obtained from technology industry in the Stock Exchange of Thailand for the period from 2017 to 2019. Simple linear regression analysis was used to draw analyze the results of the study. The study found that receivables collection period and inventory conversion period have a positive impact on cash conversion cycle. Whereas payable deferral period has a negative impact on cash conversion cycle. In addition, the study found that the cash conversion cycle has a negative impact on firm profitability. Consequently, a companies can shorten the cash conversion cycle by shortening receivables collection period and inventory conversion period and to increase the payable deferral period. A decline in the cash conversion cycle leads to increased profitability.
Article history : Received 22 April 2021
Revised 10 July 2021
Accepted 16 July 2021
SIMILARITY INDEX = 2.87 %
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