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Accounting- and value-based perspectives on the linkages between working capital management and financial performance
Thesis (MCom)--Stellenbosch University, 2024.
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| Format: | Thesis |
| Language: | en_ZA |
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Stellenbosch : Stellenbosch University
2025
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| _version_ | 1867613920519258112 |
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| access_status_str | Open Access |
| author | Johnson, Liam Rory |
| author2 | Erasmus, P. D. |
| author_browse | Erasmus, P. D. Johnson, Liam Rory |
| author_facet | Erasmus, P. D. Johnson, Liam Rory |
| author_sort | Johnson, Liam Rory |
| collection | Thesis |
| dc_rights_str_mv | Stellenbosch University |
| description | Thesis (MCom)--Stellenbosch University, 2024. |
| format | Thesis |
| id | oai:scholar.sun.ac.za:10019.1/131684 |
| institution | Stellenbosch University (South Africa) |
| language | en_ZA |
| last_indexed | 2026-06-10T12:43:48.768Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from SUNScholar — Stellenbosch University Repository |
| publishDate | 2025 |
| publishDateRange | 2025 |
| publishDateSort | 2025 |
| publisher | Stellenbosch : Stellenbosch University |
| publisherStr | Stellenbosch : Stellenbosch University |
| record_format | dspace |
| source_str | SUNScholar — Stellenbosch University Repository |
| spelling | oai:scholar.sun.ac.za:10019.1/131684 Accounting- and value-based perspectives on the linkages between working capital management and financial performance Johnson, Liam Rory Erasmus, P. D. Mans-Kemp, Nadia Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Business Management. Capital -- Management Working capital Stock exchanges Johannesburg Stock Exchange Sustainable development UCTD Thesis (MCom)--Stellenbosch University, 2024. ENGLISH SUMMARY: Financial managers are constantly searching for methods to direct scarce resources toward their optimal uses to enhance financial performance. Prior researchers who considered the relationship between working capital management (WCM) and financial performance focused on accounting-based metrics within developed countries. Value-based financial performance metrics remove some of the distortions associated with accounting-based metrics, thereby contributing to a cycle of sustainable value creation. Against this background, the primary research objective of this study was to assess the linkages between WCM and financial performance by incorporating accounting-based and value-based perspectives. Quantitative data were collected for a sample of companies listed on the Johannesburg Stock Exchange over the period 2006 to 2022, thereby including two crisis periods. When considering the outcomes of the panel regression analyses, various statistically significant relationships were noted between working capital and financial performance metrics, mainly from the value-based perspective for the entire sample. A statistically significant negative relationship was noted between net operating working capital (NOWC) and return on invested capital and the spread, respectively. In contrast, a statistically significant positive relationship was observed between NOWC and free cash flow (FCF). Furthermore, a statistically significant negative relationship was reported between the net operating trade cycle and FCF. Based on the reported results, the researcher recommends that managers, directors and investors include value-based measures when reflecting on WCM considerations instead of excessively focussing on short-term profitability. Furthermore, tertiary educators should emphasise the importance of sustainable value creation. As such, they can inspire future managers, directors, and investors to contribute to a more sustainable future. AFRIKAANSE OPSOMMING: Finansiele bestuurders is voortdurend op soek na metodes om skaars hulpbronne optimaal te benut en sodoende finansiele prestasie te verbeter. Vorige navorsers wat die verhouding tussen bedryfskapitaalbestuur en finansiele prestasie ondersoek het, het hoofsaaklik gefokus op rekenkundige maatstawwe binne ontwikkelde lande. Waardegebaseerde finansiele prestasiemaatstawwe verwyder sommige van die verdraaiings wat verband hou met rekenkundige maatstawwe, en dra sodoende by tot 'n siklus van volhoubare waardeskepping. Teen hierdie agtergrond was die primere navorsingsdoelwit van hierdie studie om die verwantskappe tussen bedryfskapitaalbestuur en finansiele prestasie te assesseer deur rekenkundige en waardegebaseerde perspektiewe in te sluit. Kwantitatiewe data is ingesamel vir 'n steekproef van maatskappye wat oor die tydperk 2006 tot 2022 op die Johannesburgse Aandelebeurs genoteer was. Twee krisis periodes is sodoende ingesluit. By die oorweging van die uitkomste van die paneelregressie-ontledings, is verskeie statisties beduidende verwantskappe tussen bedryfskapitaal en finansiele prestasie opgemerk, hoofsaaklik vanuit die waardegebaseerde perspektief vir die volledige steekproef. ‘n Statisties beduidende negatiewe verwantskap is opgemerk tussen netto bedryfskapitaal (NOWC), en opbrengs op beleggingskapitaal en die verspreiding, onderskeidelik. Daarteenoor is ‘n statisties beduidende positiewe verband tussen NOWC en vrye kontantvloei (FCF) waargeneem. Voorts is ‘n statisties beduidende negatiewe verwantskap tussen die netto bedryfshandelsiklus en FCF aangeteken. Op grond van die aangetekenderesultate, beveel die navorser aan dat bestuurders, direkteure en beleggers waardegebaseerde maatstawwe insluit wanneer hulle reflekteer op WCM-oorwegings, in plaas van ʼn oormatige fokus op kort-termyn winsgewendheid. Verder moet tersiere opvoeders die belangrikheid van volhoubare waardeskepping beklemtoon. Sodoende kan hulle toekomstige bestuurders, direkteure en beleggers inspireer om by te dra tot ‘n meer volhoubare toekoms. Masters 2025-02-05T12:48:50Z 2025-02-05T12:48:50Z 2024-12 Thesis https://scholar.sun.ac.za/handle/10019.1/131684 en_ZA Stellenbosch University xiv, 164 pages : illustrations, maps, includes annexures application/pdf Stellenbosch : Stellenbosch University |
| spellingShingle | Capital -- Management Working capital Stock exchanges Johannesburg Stock Exchange Sustainable development UCTD Johnson, Liam Rory Accounting- and value-based perspectives on the linkages between working capital management and financial performance |
| title | Accounting- and value-based perspectives on the linkages between working capital management and financial performance |
| title_full | Accounting- and value-based perspectives on the linkages between working capital management and financial performance |
| title_fullStr | Accounting- and value-based perspectives on the linkages between working capital management and financial performance |
| title_full_unstemmed | Accounting- and value-based perspectives on the linkages between working capital management and financial performance |
| title_short | Accounting- and value-based perspectives on the linkages between working capital management and financial performance |
| title_sort | accounting and value based perspectives on the linkages between working capital management and financial performance |
| topic | Capital -- Management Working capital Stock exchanges Johannesburg Stock Exchange Sustainable development UCTD |
| url | https://scholar.sun.ac.za/handle/10019.1/131684 |
| work_keys_str_mv | AT johnsonliamrory accountingandvaluebasedperspectivesonthelinkagesbetweenworkingcapitalmanagementandfinancialperformance |