Different Working Capital Polices and the Profitability of a Firm

Tamer Bahjat Sabri


This study examines if there is a difference between the Profitability of Jordanian industrial companies which
have a low cash conversion cycle and the Profitability of those which have a high cash conversion cycle.
Moreover, eight indexes have been developed to help the investor and the manager of the company in Jordan in
to make their decisions. To achieve the objectives of the study, a sample of 45 Jordanian industrial companies
listed at Amman Stock Exchange (ASE) was studied. The study covered the period from 2000 to 2007. T-Tests
and Mann-Whitney-U Tests were used to test the four hypotheses of the study. It was concluded that there was a
statistically significant difference among the companies that have a high cash conversion cycle and those which
have a low cash conversion cycle. Eight indexes of performance differed between companies with high cash
conversion cycles and companies with low cash conversion cycles.

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DOI: http://dx.doi.org/10.5539/ijbm.v7n15p50

International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

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