The impact of working capital management on the business performance: Evidence from food and beverage firms listed on the Vietnamese stock market

Abstract

This research analyzes the impact of working capital management on the business performance of F&B companies listed on the Vietnamese stock market in supporting these firms to improve business performance in the Covid-19 period. By utilizing the Feasible Generalized Least Squares (FGLS) regression model and using data from 44 F&B enterprises listed on HOSE and HNX, covering the period from 2017 to 2022, the research results indicate that certain independent variables such as Inventory Conversion Period (ICP), Receivables Conversion Period (RCP), Payable Deferral Period (PDP), and Cash Conversion Cycle (CCC) exhibit adverse effects on the dependent variable, Return On Assets (ROA). Moreover, the model incorporates control variables indicating that enterprise Size (SIZE) has a positive impact, while financial Leverage (LEV) exerts an inverse effect on ROA. The study did not observe a discernible relationship between the Current Ratio (CR) and ROA.