Thesis (MBA)--Stellenbosch University, 2009. / ENGLISH ABSTRACT: The purpose of this report is to establish whether a statistically significant relationship exists
between a company's profitability and its working capital management. Profitability is measured by
the return on assets, return on equities and Tobin's q ratio - the dependent variables in the report.
Working capital management is assessed by inventory period, receivable period, payable period,
operating cycle, cash conversion cycle and operating cash flow to total assets ratio - the
independent variables in the report. Other independent variables applied are leverage and real gross
domestic product growth rate. The report used a sample of working capital intensive companies
listed on the Johannesburg Stock Exchange for the period of 1995-2005. These companies are
divided into four sub-samples based on their working capital intensiveness. Companies with a ratio
of current assets to total assets ranging from 0% to 24,99%, and from 25,00% to 49,99% are
regarded as less working capital intensive. Companies with a ratio of current assets to total assets
ratio ranging from 50,00% to 74.99%, and from 75,00% to 100.00% are considered high working
capital intensive.
The results of this research reveal that there is a positive statistically significant relationship
between profitability and operating cash flow to total assets ratio. Therefore, companies with
positive operating cash flow figures are likely to be profitable. The results exhibit a negative
relationship between profitability and leverage. This is an indication that in order to increase its
profitability, a company needs to reduce its debt ratio and keep it within the optimum capital
structure level. The relationship between profitability and other independent variables is not
consistent, indicating variation in working capital policies across industries. There is also a positive
relationship between profitability and real GDP growth rate, although this is reflected during 2000
only. This indicates that companies' profitability is influenced by the overall economic
performance.
The report further evaluates whether less working capital intensive companies are more profitable
as compared to high working capital intensive companies. Evidence shows that there is no
difference in the profitability of less working capital intensive companies and high working capital
intensive companies. However, there is confirmation that less working capital intensive companies
have a high Tobin's q ratio as compared to high working capital intensive companies. This means
that the percentage difference between the market value and assets is higher for less working capital
intensive companies as compared to that of high working capital intensive companies. / AFRIKAANSE OPSOMMING: Die doel van hierdie verslag is om vas te stel of 'n statisties betekenisvolle verhouding tussen die
winsgewendheid en die bedryfskapitaal bestuur van 'n maatskappy bestaan. Winsgewendheid word
gemeet aan die opbrengs op bates, opbrengs op aandeelhouersbelang en Tobin se q-verhouding -
die afhanklike veranderlikes in die verslag. Bedryfskapitaal bestuur word gemeet deur
voorraadperiode, debiteursperiode, krediteursperiode, operasionele siklus, kontantomsettingsilkus
en kontantvloei uit bedryfsaktiwiteite tot totale bates-verhouding - die onafhanklike veranderlikes
in die verslag - te bepaal. Ander onafhanklike veranderlikes aangewend is skuldkapitaal
verhouding en groei-tempo van die reele binnelandse produk. Die verslag het gebruik gemaak van
'n seleksie van bedryfskapitaal intensiewe maatskappye wat op die Johannesburgse Aandelebeurs
genoteer was vir die tydperk 1995-2005. Hierdie maatskappye is in vier sub-groepe verdeel volgens
bedryfskapitaal intensiwiteit. Maatskappye met 'n verhouding van bedryfsbates tot totale bates
tussen 0% en 24,99%. en 25,00% tot 49,99% word as minder bedryfskapitaal intensief beskou,
terwyl maatskappye waar hierdie verhouding tussen 50,00% en 74,99%, en 75,00% en 100,00% Iê
as hoogs bedryfskapitaal intensief beskou word.
Die resultate van hierdie navorsing dui op 'n statisties betekenisvolle verhouding- tussen
winsgewendheid en die verhouding van kontantvloei uit bedryfsaktiwiteite tot fatale bates. Dus is
maatskappye met positiewe kontantvloei-syfers uit bedryfsaktiwiteite waarskynlik winsgewend.
Die resultate dui op 'n negatiewe verhouding tussen winsgewendheid en skuldkapitaal-verhouding,
wat daarop dui dat 'n maatskappy die skuld-verhouding moet verminder en binne die optimale
kapitaalstruktuur vlak te bly om winsgewendheid te vcrbeter. Die verhouding tussen
winsgewendheid en ander onafhanklike veranderlikes is nie konstant nie, wat op beleidsverskille
dui ten opsigte van bedryfskapitaal tussen verskillende nywerhede. Daar is 'n positiewe verhouding
tussen winsgewendheid en groei in reele binnelandse produk, selfs al word hierdie verhouding slegs
gedurende 2000 gesien. Dit dui daarop dat die winsgewendheid van maatskappye beinvloed word
deur die algehele ekonomiese toestand.
Die navorsing ondersoek verder of minder bedryfskapitaal intensiewe maatskappye meer
winsgewend is as meer bedryfskapitaal intensiewe maatskappye. Resultate dui geen verskil tussen
die winsgewendheid van minder bedryfskapitaal intensiewe maatskappye en meer bedryfskapitaal
intensiewe maatskappye aan nie, maar bevestig wel dat minder bedryfskapitaal intensiewe
maatskappye 'n hoër Tobin se q-verhouding toon. Dit beteken dat die persentasie verskil tussen
markwaarde en totale bates hoër is vir minder bedryfskapitaal intensiewe maatskappye as vir meer
bedryfskapitaal intensiewe maatdkappye.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/97171 |
| Date | 12 1900 |
| Creators | Nakale, Mansueta Maria Nandjila |
| Contributors | Hamman, Willie, Stellenbosch University. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | Unknown |
| Type | Thesis |
| Format | 108 p. |
| Rights | Stellenbosch University |
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