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Defined strategies for financial working capital management

Author

Listed:
  • Anna-Maria Talonpoika
  • Timo Kärri
  • Miia Pirttilä
  • Sari Monto

Abstract

Purpose - – The purpose of this paper is to develop strategies for financial working capital management and to present previous literature on financial working capital management and its measures. Design/methodology/approach - – Qualitative comparative analysis is used to formulate the strategies, and the variables in the analysis have been selected from previous literature. Empirical data consists of 91 companies listed in the Helsinki Stock Exchange during 2008-2012. Findings - – The results indicate 11 possible strategies for financial working capital management which all aim at increasing financial working capital. There are suitable strategies for all companies independent from their profitability, capital intensity or working capital requirements. Research limitations/implications - – The presented strategies have been created theoretically and have not been tested in companies, which could be done in future research. Originality/value - – This study has three contributions. First, previous literature on financial working capital management is reviewed. Second, a novel measure for financial working capital is developed. Third, strategies for financial working capital management are presented.

Suggested Citation

  • Anna-Maria Talonpoika & Timo Kärri & Miia Pirttilä & Sari Monto, 2016. "Defined strategies for financial working capital management," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 12(3), pages 277-294, June.
    • Handle: RePEc:eme:ijmfpp:v:12:y:2016:i:3:p:277-294
    DOI: 10.1108/IJMF-11-2014-0178
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    Citations

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    Cited by:

    1. Ivakina, A. & Zenkevich, N., 2018. "Working capital optimization under liquidity constraints in collaborative supply chains," Working Papers 15110, Graduate School of Management, St. Petersburg State University.
    2. Lingesiya Kengatharan & W. S. Sanoli Tissera, 2019. "Do Corporate Governance Practices Influence Working Capital Management Efficiency? Evidence From Listed Manufacturing Companies in Sri Lanka," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(3), pages 205-216, December.
    3. Zheng, Xiaotian & Zhou, Youcheng & Iqbal, Sajid, 2022. "Working capital management of SMEs in COVID-19: role of managerial personality traits and overconfidence behavior," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 439-451.
    4. Hakim Lyngstadaas, 2020. "Packages or systems? Working capital management and financial performance among listed U.S. manufacturing firms," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 31(4), pages 403-450, December.
    5. Zanxin Wang & Minhas Akbar & Ahsan Akbar, 2020. "The Interplay between Working Capital Management and a Firm’s Financial Performance across the Corporate Life Cycle," Sustainability, MDPI, vol. 12(4), pages 1-16, February.
    6. Muhammad Azeem Naz & Rizwan Ali & Ramiz Ur Rehman & Collins G. Ntim, 2022. "Corporate governance, working capital management, and firm performance: Some new insights from agency theory," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(5), pages 1448-1461, July.

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