Thesis (M.Sc.) - Cairo University - Faculty of Commerce - Department of Accounting

The objective of this research is to examine the impact of working Capital Management (WCM) and Financial Reporting Quality (FRQ) on firm{u2019}s Financial Performance (FP). In this research, a sample of 61 Egyptian firms listed in the Egyptian stock Exchange is used for a period of five years from 2014 to 2018. The Panel Least Squares (PLS) and Estimated Generalized Least Square (EGLS) Regression analysis are employed to test the research hypotheses. Cash Conversion Cycle (CCC), Average Days of collecting Receivables (ADR), Average Days of holding Inventory (ADI) and Average Days of payment of Payables (ADP) are used to measure WCM, The modified Jones model (1995) is used to measure FRQ, and Return On Assets (ROA), Return On Equity (ROE) and Earnings Per Share (EPS) are used to measure firm{u2019}s FP. The results revealed that there is a significant negative impact of CCC on firm{u2019}s FP measured by ROA, ROE and EPS. Moreover, it is found that ADR and ADI have a significant negative impact on ROA. Also, it is found that ADI has a significant negative impact on ROE, while ADP has a significant positive impact on ROE. Additionally, there is a significant negative impact of ADR on EPS. Therefore, the efficient management of working capital can be achieved through shortening ADR and ADI and lengthening ADP as possible which in turn will be reflected positively on overall firm{u2019}s FP. Furthermore, the results indicated that FRQ has insignificant impact on ROA. Also, it is found that FRQ has a significant positive impact on ROE, while it has a significant negative impact on EPS. This implies that the lower the FRQ, the lower the ROE and the higher the EPS. Finally, the results show that the involvement of Earnings Management (EM) practices through deceasing FRQ, strengthen the relationship between WCM and ROA.Thus, managers use EM practices in the process of WCM to improve firm{u2019}s FP measured by ROA

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