Longer cash conversion cycles lead to lower company profits in Oman.
The study looked at how managing working capital affects the profitability of companies in Oman. They used data from 66 companies over four years and found that the time it takes to convert cash into profits has a significant impact on gross profit and EBIT margins. Specifically, the number of days it takes to pay suppliers has a big effect on these margins. However, the overall return on assets is not affected by how efficiently companies manage their working capital.