Research Paper
The research paper is designed to analyze the impact of Saudi 2030 initiatives and the current working capital practices on the financial performance of the companies in the retail sector of Saudi Arabia. Rather than relying on the secondary data, which was partially available only for multiples related to the working capital of the companies, we designed the entire research study using the cross-sectional layout. As part of this research method, a questionnaire, designed in consultation with the experts, was used. The questionnaire was categorized in two categories where responses related to qualitative aspects and quantitative aspects were recorded separately. The questions in the qualitative category were related to the cuts of public sector employee allowances, switch of public sector employees salaries and announced fees by the Ministry of Municipal and Rural Affairs. Perceptual responses were recorded in a five – point Likert scale ranging from Strongly Agree to Strongly Disagree. On the other hand, the questions in the quantitative category were related to working capital management practices, cash management practices, receivable management practices, inventory management practices and the financial performance. The responses here were recorded on the respective scales ranging from the numerical to self-disclosed quantitative response.
Post collecting the required responses and summarizing them in the numeric form, the impact of these variables were accessed on the Return on Assets(ROA), Return on Equity(ROE) and Net Profit Margin, individually, using the correlation analysis and multiple regression analysis. The correlation matrix will allow us to access directional relationship between all the variables. The results will then be compared with the results of regression analysis. As for regression analysis, our research methodology comprised of three multiple regression where the dependent variables, ROA, ROE and Net Profit Margin were individually regressed against the independent variables. The outcome of regression analysis in the form of ANOVA table will help us understand the impact of the independent variables on the dependent variables. For instance, the adjusted r-square multiple will indicate what percentage of the total variation in the dependent variable is explained by the group of independent variables. Accordingly, we will be able to judge the validity of the regression model. Similarly, t-value and p-value will make us understand the significance of each independent variable in explaining the variation in the dependent variable.
Post performing the correlation and regression analysis, we will culminate the research paper with a concise conclusion discussing the best practices of working capital management to embrace businesses in the retail sector to improve the financial performance.
