Title The influence of business cycle and working capital management on real estate developers profitability in baltic countries /
Translation of Title Verslo ciklo ir apyvartinio kapitalo valdymo įtaka nekilnojamo turto vystytojų pelningumui Baltijos šalyse.
Authors Kairys, Daumantas
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Pages 66
Keywords [eng] Keywords: Business cycle, working capital, ROA, cash conversion cycle, RGDP, regression analysis, Pearson‘s correlation, Hanner, Bonava, Endover, account payables, account receivables. Raktiniai žodžiai: Verslo ciklas, apyvartinis kapitalas, ROA, grynųjų pinigų konversija, RGDP, tiesinė regresinė analizė, Pearson koreliacija, Hanner, Bonava, Endover, mokėtinos sąskaitos, gautinos sumos.
Abstract [eng] 62 pages, 6 figures, 15 formulas, 23 tables, 24 references. The main goal is to investigate the influence of business cycle and working capital management on Real estate companies profitability in Baltic countries, by analyzing and comparing Real estate developer in each Baltic country. The main paragraphs that Master thesis consists of – literature review, methodology, research and results, conclusion and recommendations. Literature review contained business cycle concept, defined Real GDP to represent it. Further on real estate financing models, development stages and industry insights were examined and deepened into working capital management strategies for real estate developers. Cash conversion cycle have been defined as one of the most important measure for working capital management. In a methodology part, financial ratios ROA, ROE, liquidity and solvency ones were described as suitable ones for further analysis, together with Real GDP and Commercial lending interest rates. To evaluate if there is an impact of business cycle and working capital management to real estate developers, Pearson’s Correlation and multiple linear regression analysis selected as a tools. Companies for each Baltic country were chosen as follows: Hanner UAB for Lithuania, Bonava Latvija SIA for Latvia, Osaühing Endover KVB for Estonia. In depth analysis of each ratio, RGDP and interest rates were performed in order to examine observations of 13 years period, companies working capital management strategies, profitability and economic outlook. Pearson’s correlation enabled to identify many strong correlations between the ratios, however it did not defined impact to each other, while multiple linear regression analysis highlighted different factors for different deployed strategies by the companies. Significant impact of Real GDP and cash conversion cycle been observed, confirming the benefit of excellent working capital management for companies profits. Research as well pointed to resilience advantage of conservative funding model and gaps against economic cycles, possible negative debt impact and different operations scale across economic cycles. Conclusions and recommendations summarize the key points of literature review, methodology and performed research part. The observations and outcome of study could contribute to companies as a guiding focus points to maximize profitability in terms of working capital management and different economic cycles.
Dissertation Institution Vilniaus universitetas.
Type Master thesis
Language English
Publication date 2023