Inventory management and its influence on financial performance: an analysis in manufacturing companies

Authors

DOI:

https://doi.org/10.5585/exactaep.v19n1.14751

Keywords:

Inventory, Working capital, Financial Performance, Brazilian industries, INDX Bovespa

Abstract

The present study aims to assess how the maintenance of inventory levels may affect profitability, returns, and share performance in order to maximize shareholder wealth. For this purpose, panel data regressions were applied for fixed and random effects, based on financial data from companies which represents Brazilian manufacturing sector, listed in the BM&FBOVESPA Industrials Index (INDX) (http://www.b3.com.br/pt_br/market-data-e-indices/indices/indices-de-segmentos-e-setoriais/indice-do-setor-industrial-indx.htm, recovered on August 23, 2019). The results show that this hypothesis confirmation or refutation vary according to the financial and inventory management metrics used, respectively, as dependent, or independent variables. Another conclusion is that shareholder value creation has greater influence or is better able to isolate the effect of a correct inventory management, when compared to profitability and return metrics, only if linked to raw material or finished products indicators.

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Author Biographies

André Carrara Cotomácio, UFSCar - Universidade Federal de São Carlos - Campus Sorocaba

Mestre em Engenharia de Produção pela

Universidade Federal de São Carlos – UFSCAR – Campus Sorocaba

Jorge Luis Faria Meirelles, UFSCar - Universidade Federal de São Carlos - Campus Sorocaba

Doutor em Engenharia de Produção pela Escola de Engenharia de São Carlos da Universidade de São Paulo – EESC/USP.

Professor associado do Departamento de Engenharia de Produção da Universidade Federal de São Carlos - UFSCAR

Nara Rossetti, UFSCar - Universidade Federal de São Carlos - Campus Sorocaba

Doutora em Engenharia de Produção pela Escola de Engenharia de São Carlos da Universidade de São Paulo – EESC/USP.

            Professora adjunta do Departamento de Engenharia de Produção da Universidade Federal de São Carlos - UFSCAR

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Published

2021-03-25

How to Cite

Cotomácio, A. C., Meirelles, J. L. F., & Rossetti, N. (2021). Inventory management and its influence on financial performance: an analysis in manufacturing companies. Exacta, 19(1), 87–106. https://doi.org/10.5585/exactaep.v19n1.14751

Issue

Vol. 19 No. 1 (2021): (jan./mar.)

Section

Papers

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