The impact of working capital management on firm’s profitability: Evidence from construction material companies in Vietnam

Abstract

This study aims at analyzing and evaluating the impact of working capital management on return on equity (ROA) of construction material companies in Vietnam. The author uses panel data from 42 construction material companies listed on Vietnamese stock exchange from 2012 to 2016. The study results show evidence of signigicant impact of working capital components including average collection period, average days payable on return on asset. Besides, the author finds that firm size, debt ratio and asset tangibility significantly affect the companies’ return on asset.