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The Effect of Working Capital Management on the Profitability of Assets of Construction Enterprises


Le Quoc Chinh

Article (PDF)

Keywords

Working Capital, Construction Industry, Vietnamese Enterprises.

Abstract

The study aims to analyze the effect of working capital management on the profitability of assets of construction enterprises. The study sample was 181 construction enterprises, corresponding to 1,856 observations from 2010 to 2021: quantitative research methods models with time series FEM, REM, OLS, and GLS. The author has determined that the average collection period (ACP) and average payment period (APP) are adversely correlated with the profitability of construction businesses. Meanwhile, net working capital and solvency are positively correlated. Based on the study, the author offers several discussions and assessments on the critical role of improving profitability and financial solution recommendations to manage working capital based on improving profitability.