engleski

The Influence of Working Capital on Profitability in Construction Industry

We examine the relationships between a group of representative liquidity variables and profitability in 33 Croatian construction companies during the period of 2012 - 2016. The impact of working capital on profitability is studied using correlation and regression analysis. Results of the analysis show that liquidity variables such as cash conversion cycle, current ratio and quick ratio along with control variables significantly affect profitability. Contrary to the findings of the relevant research, indicators such as receivables collection period, inventory conversion period and payables deferral period did not have a significant impact on profitability.

working capital, profitability, regression analysis

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