TY  - JOUR
AB  - Purpose– The purpose of this paper is to investigate the relation between a firm's cash conversion cycle and its profitability.Design/methodology/approach– The relation between the firm's cash conversion cycle and its profitability is examined using dynamic panel data analysis for a sample of Japanese firms for the period from 1990 to 2004. The analysis is applied at the levels of the full sample and divisions of the sample by industry and by size.Findings– A strong negative relation between the length of the firm's cash conversion cycle and its profitability is found in all of the authors’ study samples except for consumer goods companies and services companies.Originality/value– Traditional focus in corporate finance was on the long‐term financial decisions, particularly capital structure, dividends, and company valuation decisions. However, the recent trend in corporate finance is the focus on working capital management. Most of working capital management literature is based on the US experience. This study investigates the relation between the firm's cash conversion cycle and its profitability of Japanese firms where the organizational structure is totally different from that of the US firms; most of the Japanese firms are interconnected and related through corporate groups (keiretsu).
VL  - 19
IS  - 2
SN  - 1321-7348
DO  - 10.1108/13217341111181078
UR  - https://doi.org/10.1108/13217341111181078
AU  - Nobanee Haitham
AU  - Abdullatif Modar
AU  - AlHajjar Maryam
PY  - 2011
Y1  - 2011/01/01
TI  - Cash conversion cycle and firm's performance of Japanese firms
T2  - Asian Review of Accounting
PB  - Emerald Group Publishing Limited
SP  - 147
EP  - 156
Y2  - 2024/04/24
ER  -