The Relationship between Working Capital Management and Profitability: Evidence from Turkey

Famil Şamiloğlu () and Ali İhsan Akgün ()
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Famil Şamiloğlu: Muğla Sıtkı Koçman University
Ali İhsan Akgün: Yıldırım Beyazıt University

Business and Economics Research Journal, 2016, vol. 7, issue 2, 1-14

Abstract: The purpose of this study is to examine the relationship link working capital management and performance such as profitability between accountant receivable period, accountant payable period and cash conversion cycle on Istanbul Stock Exchange (ISE) during the last ten years.This paper examines the relationship between working capital management and profitability. A sample of 120 Turkish manufacturing firms listed on ISE for a period 10 years from 2003 to 2012 was selected. Multiple linear regression models have been used to find out the relationship between working capital management and firm performance in the context of Turkey. The findings of this paper show a significant and negative relationship between account receivable period and return on asset, return on equity, operating profit margin and net profit margin in the manufacturing industry. We expect that managers can create value for shareholders by reducing accountant receivable period, accountant payable period, cash conversion cycle.

Keywords: Working Capital Management; Cash Conversion Cycle; Inventory Conversion Period; Accountant Receivables Period; Accountant Payable Period (search for similar items in EconPapers)
JEL-codes: G32 M40 M41 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:buecrj:0220

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