Impact of Working Capital Management on Performance of ASX Mining

This report investigates the impact of working capital management (WCM) on the performance of mining companies listed on the Australian Securities Exchange (ASX). It begins by defining WCM and its importance in the context of increasing market competition and globalization. The research aims to identify factors affecting the performance of these mining companies, analyze the effect of working capital on them, and recommend strategies for improvement. The literature review covers key concepts like return on assets (ROA), number of day’s receivable (NDR), and inventory management, highlighting their relationship with WCM. The research methodology employs a qualitative approach using secondary data from online journals and articles, analyzed through thematic analysis. Ethical considerations are addressed, ensuring data security and participant privacy. The report concludes with a Gantt chart outlining the research timeline.

Running head: IMPACT OF WORKING CAPITAL MANAGEMENT ON THE
PERFORMANCE OF COMPANY
Impact of working capital management on the performance of company:
A study on mining companies listed on Australian securities Exchange
(ASX)
Name of the Student
Name of the University

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IMPACT OF WORKING CAPITAL MANAGEMENT ON THE PERFORMANCE OF
COMPANY
Table of Contents
1. Introduction..................................................................................................................................3
1.1 Background............................................................................................................................3
1.2 Aims, Objectives and Research Questions............................................................................3
2. Literature Review........................................................................................................................4
2.1 Concept of working capital management..............................................................................4
2.2 Return on Assets....................................................................................................................5
2.3 Number of day’s receivable (NDR).......................................................................................6
2.4 Inventory................................................................................................................................6
3. Research Methodology................................................................................................................7
Gantt chart.......................................................................................................................................8
References......................................................................................................................................10

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IMPACT OF WORKING CAPITAL MANAGEMENT ON THE PERFORMANCE OF
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1. Introduction
1.1 Background
It has been crucial for being aware of effects of management of working capital
indicators on performance of company. The dimension of enterprises change from local to
international has been a part of competition in the market. The increase in competition in the
market has been due to rise in globalization. The working method of companies need to be
enhanced to increase efficiency in the market (Enqvist, Graham & Nikkinen, 2014). The
profitability of the company has been totally depended on working capital. The working capital
management (WCM) has been focused on ability of company for funding difference between
long term assets and short term assets. Business organizations have been helping in providing
several opportunities to customers with their offeres and products. The use of WCM has been
helping in providing better outlook of the business organization in order to maintain a sustainable
development ion market. Therefore, management of working capital and some other issues
including resources that are financed. Acceptance of several efficient management has been in
terms of working capital management (Agha, 2014). An effective and efficient management of
working capital have no doubt in providing positive contribution to the performance of the
company. However, it can be in related to the behavior of customers in the market. Recently,
WCM has been an issue for various companies in the market. There has been strong relationship
with mining industry of the Australian securities Exchange (ASX).
This research has been done for analyzing effect of working capital in performance of
company in the mining industry listed under Australian Exchange. Various performance factors
have been discussed in the research.

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IMPACT OF WORKING CAPITAL MANAGEMENT ON THE PERFORMANCE OF
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1.2 Aims, Objectives and Research Questions
The research aims to analyze effect of working capital on performance of mining
companies listed in Australian Security Exchange (ASX).
Following are objectives of the research:
 To identify the factors affecting the performance of mining companies in ASX
 To analyses effect of working capital on the mining companies in ASX
 To recommend strategies for improving efficiency of mining companies in ASX
Following are research questions:
 What are the factors affecting performance of mining companies in ASX?
 What is effect of working capital on mining companies in the ASX?
 How to improve efficiencies of mining companies in ASX?
2. Literature Review
2.1 Concept of working capital management
As commented by Baños-Caballero, García-Teruel & Martínez-Solano (2014), working
capital has been a sum of owned assets and current assets. Working capital has been utilized for
affording short-term expenses including labor, raw materials, general administrative expenses,
tax and repair expenses. Working capital is also known as business capital that helps in creating
greater importance for the development of company. The current assets in the company have
been depended on the working capital. The current assets include money, stocks, receivables,
securities and other current assets. The working capital and performance of companies have been
included in development in the market. There have been chances of inequalities in current assets

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IMPACT OF WORKING CAPITAL MANAGEMENT ON THE PERFORMANCE OF
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and liabilities of the company during its growth in the market. The profitability of the company
has been totally depended on the working capital (Mwangi, Makau & Kosimbei, 2014). The
working capital management has been focused on ability of company for funding difference
between long term assets and short term assets. However, it can be in related to the behavior of
customers in the market. Recently, working capital management has been an issue for various
companies in the market. The liquidity in the market has been increasing in the market with
improper management of working capital. The optimum level of WCM has been helpful in
maintaining growth of company. The market of the ASX has been analyzed properly that include
different dimensions of working capital in the market. The performance of company with the
appropriate use of working capital has been mentioned in the literature review of various
researchers (Abdulazeez et al., 2018). There has been several researches done on effect of
working capital management and its impact on performance of the company. These researches
explain that there has been neutral impact, which shows deficiencies in the policies of the
company. Therefore, this research has been focused on measuring factors of working capital
management. Most of the companies are not able to maintain their working capital in the
operations. Therefore, it directly imposes effect on performance of the company in the market.
Companies are not to track changes in the market and their assets and liabilities (Pais & Gama,
2015). The WCM has been a better way to track these changes in company. The dimensions of
WCM has been including current ratios, CCC, average days of payment and inventory turnover.
2.2 Return on Assets
Return on Assets refers to how much a company generates profit with available
resources. It can be also called as Return on Investment (ROI) (Aktas, Croci & Petmezas, 2015).
The correlation between operating performance and liquidity has been related to the monetary

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IMPACT OF WORKING CAPITAL MANAGEMENT ON THE PERFORMANCE OF
COMPANY
structure. The use of monetary structure has been helping ion maintaining a keen approach in
linking working capital and performance of company in the market. Liquidity is directly
proportional to performance of company. The company have to keep track of the assets invested
in the market and take a proper step in order to maintain profit in the market. Therefore, the use
of return on assets conceit have been depended in the profit that a company makes over their
investment in the market. The use of the ROI has been helping in providing a keen approach to
the development of the company. The value of company asset has been depended on the business
strategies that it follow in the market.
2.3 Number of day’s receivable (NDR)
Sales have been made on credit and payment recovery on these sales in period is called as
number of days receivable (NDR). The cash conversion cycle has been describing the collection
of period that helps organization for buying main figure of stock period (Nobanee & Ellili,
2015). This cycle has been depended on use of working capital in management of the
organization. The performance of the company has been due to the investment of the company in
the market. There have been chances of inequalities in current assets and liabilities of the
company during its growth in the market. The working capital management has been deepened
on several favors including NDR. The use of the NDR technique has been helping in proper
management of the resources of the companies (Ismail, 2016). The amount of work done by
employees in the development of the company has been depended in the organizational structure.
Therefore, this has been an important section for growth of company in the market. The large
quantities of the stick of the company has been transformed into the working capital that can be
invested for the development of the company in the market. Therefore, there has been a frequent
relationship between NDR and ROI.

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IMPACT OF WORKING CAPITAL MANAGEMENT ON THE PERFORMANCE OF
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2.4 Inventory
Inventory has been a specific part of assets of the company. The decision making system of the
company has been depended on the inventory control, management of the company in the
market. The use of the inventory control has been depended on the working capital management
in company. The performance of company in market has been depended in the inventory control
of operations (Mathuva, 2015). There has been several researches done on effect of working
capital management and its impact on performance of the company. The inventory control, deals
with the management of resources in the stock of the company and maintains a keen approach to
the development of the company. These researches explain that there has been neutral impact,
which shows deficiencies in the policies of the company. The strength of the company has been
depended on the business strategies used in the market. Therefore, by reducing the level of the
inventory has been depended on turnover of the company in the market.
3. Research Methodology
This research will select qualitative method for analyzing effect of working capital on
performance of mining companies in ASX. The research will use positivism philosophy as it
deals with hypothesis and scientific method regarding the impact of working capital on
performance of mining companies in ASX. Deductive methodology helps in keeping up a basic
way to deal with the advancement of the speculation in the research. The utilization of the
deductive methodology has been keeping up a connection among variable and ideas of the
examination think about (Mwangi, Makau & Kosimbei, 2014). Deductive methodology has been
helping in finishing the examination contemplate in a brief timeframe period. The working
capital and performance of companies have been included in development in the market. The
research will use deductive approach for focusing on objectives of the research study. The use of

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descriptive research design will help in describing all the factors included in the study and
providing a conclusion to it.
Secondary data collection method has been selected in this research. Data will be
collected from using online journals, books and articles. This sample size will be 10 scholarly
peer reviewed journals based on the research topic. (Farooq et al., 2016). Qualitative data
analysis will be used to analyze data and information. Thematic analysis will be done by creating
three themes based on the research objectives.
Research will follow all ethical considerations under different sections of academic
research. Data and information will be kept safe and secure till the end of the research. Data will
be secured under the Data Protection Act 1998 (Azeez, Abubakar & Olamide, 2016). Personal
private information of the participants will kept secure and will not be used at any part of the
research. All journals will be published and after 2012 year journal will be taken for the research
study. All journals will be peer reviewed that help in checking validity and reliability of data
sources. No participants will be forced to remain included in the research. They will be free to
leave the research at any point of time. Data and information of the research will be used for only
research purpose. There will be no tampering of data used during data analysis method. Results
and outcomes of the research will not be published until the completion of research.
Gantt chart

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IMPACT OF WORKING CAPITAL MANAGEMENT ON THE PERFORMANCE OF
COMPANY
References
Abdulazeez, D. A., Baba, N. A., Fatima, K. R., & Abdulrahaman, Y. (2018). Working Capital
Management and Financial Performance of Listed Conglomerate Companies in
Nigeria. Journal of Accounting, Finance and Auditing Studies, 4(2), 49-66.
Agha, H. (2014). Impact of working capital management on Profitability. European Scientific
Journal, ESJ, 10(1).
Aktas, N., Croci, E., & Petmezas, D. (2015). Is working capital management value-enhancing?
Evidence from firm performance and investments. Journal of Corporate Finance, 30, 98-
113.
Azeez, O. T., Abubakar, M. A., & Olamide, F. T. (2016). Analysis of the effects of working
capital management on profitability of listed Nigerian conglomerate companies. FWU
Journal of Social Sciences, 10(1), 10-20.
Baños-Caballero, S., García-Teruel, P. J., & Martínez-Solano, P. (2014). Working capital
management, corporate performance, and financial constraints. Journal of Business
Research, 67(3), 332-338.
Enqvist, J., Graham, M., & Nikkinen, J. (2014). The impact of working capital management on
firm profitability in different business cycles: Evidence from Finland. Research in
International Business and Finance, 32, 36-49.
Farooq, U., Maqbool, M. Q., Waris, M., & Mahmood, R. (2016). Liquidity risk, performance and
working capital relationship of cash conversion cycle: An empirical study of the firms in

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COMPANY
Pakistan. International Journal of Information Research and Financial Review, 3, 1946-
1951.
Ismail, L. A. L. L. O. O. (2016). Impact of working capital management on financial
performance of SMEs across industries (Doctoral dissertation, University of Mauritius).
Mathuva, D. (2015). The Influence of working capital management components on corporate
profitability.
Mwangi, L. W., Makau, M. S., & Kosimbei, G. (2014). Effects of working capital management
on performance of non-financial companies listed in NSE, Kenya. European journal of
business and management, 6(11), 195-205.
Mwangi, L. W., Makau, M. S., & Kosimbei, G. (2014). Relationship between capital structure
and performance of non-financial companies listed in the Nairobi Securities Exchange,
Kenya. Global Journal of Contemporary Research in Accounting, Auditing and Business
Ethics, 1(2), 72-90.
Nobanee, H., & Ellili, N. (2015). Working capital management and performance of Kuwait
construction companies.
Pais, M. A., & Gama, P. M. (2015). Working capital management and SMEs profitability:
Portuguese evidence. International Journal of Managerial Finance, 11(3), 341-358.