The Moderating Role of Financial Leverage in the Relationship between Working Capital Management and Financial Performance of the Agro & Food Industry on the Stock Exchange of Thailand
DOI:
https://doi.org/10.14456/ajmt.2026.7Keywords:
Working Capital Management, Agro & Food Industry, Financial Leverage, Firm PerformanceAbstract
This study examines the relationship between working capital management and financial performance, with financial leverage serving as a moderating variable. The sample comprises 51 companies listed in the Agro & Food Industry sector on the Stock Exchange of Thailand, covering the period 2020–2024 and yielding a total of 233 firm-year observations. Data were analyzed using multiple regression analysis and moderation analysis via the PROCESS MACRO. The findings indicate that the current ratio has a significant effect on return on assets; however, no significant effect on return on equity was observed. Meanwhile, inventory turnover period, accounts receivable turnover period, and accounts payable turnover period showed no significant relationship with either return on equity or return on assets. Regarding the moderating role of financial leverage, the results demonstrate that financial leverage significantly moderates the relationships between the current ratio and inventory turnover period and return on assets, with the moderating effect becoming pronounced at moderate and high leverage levels. Financial leverage was also found to moderate the relationship with return on equity. These findings suggest that highly leveraged firms are better positioned to utilize working capital management, especially effective inventory control, to convert debt obligations into opportunities for generating superior returns on equity, compared with compared with low-leverage firms.
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