Factors Affecting Working Capital Management of Listed Companies in the Stock Exchange of Thailand

Abstract

The purpose of this research was to study factors affecting working capital management of listed companies in the Stock Exchange of Thailand. The research investigated 282 companies from 7 types of industries by using the previous ratio information in the past 10 years from 2007-2016. It was conducted by examining the past information and collecting 10 factors to be used for the test. The 10 factors consisted of 1) the sizes of the firms, 2) cash flow ratios to total assets from managing, 3) sales growth ratios, 4) debts to total asset ratios, 5) ability to make profits, 6) cash and operating cycles, 7) Tobin’s Q values 8) the growth of the gross domestic products, and 9) interest rates. The industry group was used as dummy variables. The statistic used to analyze data was a multi regression analysis.

The results of the multiple regression analysis showed the adjusted r square was between 0.165 - 0.220 and at the significance level of .05, the results revealed that factors affecting working capital management of listed companies in the same direction consisted of sales growth ratios, ability to make profits, ability to make profits measured by using ratios of returns on assets and returns on equity, and cash and operating cycles. However, the firm sizes, cash flow ratios to total assets from managing, debts to total asset ratios, and Tobin’s Q values affecting the working capital management in the Stock Exchange of Thailand were in the opposite direction. There were on relationship between the working capital management in the Stock Exchange of Thailand, and the external factors were significantly the growth of gross domestic products and interest rates.