Impact of Working Capital Components On Firm’s Profitability: The Case of Iron, Steel Metal Industry Sector in Borsa Istanbul

Sibel Yılmaz Türkmen and Yakup Söylemez
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Sibel Yılmaz Türkmen: Marmara University
Yakup Söylemez: Bulent Ecevit University

Journal of Finance Letters (Maliye ve Finans Yazıları), 2019, vol. 34, issue 111, 11-32

Abstract: This study aims to examine the effects of working capital management on the firm’s profitability. We used data from firms operating in Iron and Steel Industry listed on Borsa Istanbul for the period 2010-2017. In this study, positive and significant relationships were determined between asset profitability and acid test ratio, current asset/ total asset ratio and working capital turnover rate. There is a significant and negative relationship between turnover rate and return on assets. On the other hand, no relation was found between asset profitability and cash ratio and stock turnover rate. These findings imply that finance managers can increase the profitability of firms by managing their working capital in an efficient way.

Keywords: Working Capital Management; Profitability; Iron and Steel Industry; Multiple Regression Analysis (search for similar items in EconPapers)
JEL-codes: C32 G30 G33 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:acc:malfin:v:34:y:2019:i:111:p:11-32

DOI: 10.33203/mfy.431831

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