The Relationship between Working Capital and Debt Service Coverage on Return on Assets of Companies Listed on the Stock Exchange of Thailand: Reflecting the SET50 Index

Abstract

This research aims to 1) study the relationship between working capital and returns asset 2) study the relationship between debt repayment capability and returns on asset of companies listed on the Stock Exchange of Thailand: reflecting the movement of the top 50 stock index. The sample group consists of 30 companies from 2019 to 2023. This is quantitative research that collects secondary data. The statistics used in data analysis include descriptive statistics, Pearson's product momentum analysis, and multiple regression analysis. The results of the research found that working capital has a statistically significant negative relationship with asset returns, reflecting that holding a high level of working capital may negatively affect operational efficiency. In terms of debt repayment capability, the results of the research show that average debt collection period has a statistically significant negative relationship with asset returns, while average payment period has a positive relationship. When considering the level of influence, average debt collection period has the most influence on asset returns, followed by working capital and average payment period, respectively. The results of this research indicate that organizations should focus on managing trade receivables and maintaining an appropriate level of working capital to increase operational efficiency and asset returns.