Affects of Working Capital Management on Firm's Performance: Evidence from Turkey

Gamze Vural, Ahmet G khan S Kmen and Emin H seyin Cetenak
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Gamze Vural: ukurova University, Faculty of Economics and Administrative Sciences,
Ahmet G khan S Kmen: a Univeristy, Faculty of Economics and Administrative Sciences,
Emin H seyin Cetenak: ukurova University, Faculty of Economics and Administrative Sciences,

International Journal of Economics and Financial Issues, 2012, vol. 2, issue 4, 488-495

Abstract: The working capital management has an important role for the firm?s success or failure because of it?s? effect on firm?s performance and liquidity. The study is based on secondary data collected from 75 manufacturing firms listed on Istanbul Stock Exchange Market for the period 2002- 2009 with an attempt to investigate the relationship between working capital management components and performance of the firms by using dynamic panel data analysis. The results demonstrate that firms can increase profitability measured by gross operating profit by shortening collection period of accounts receivable and cash conversion cycle. Leverage as a control variable has a significant negative relationship with firm value and profitability of firms. This means, increase in the level of leverage will lead to decline in the profitability of the firm and the value of the firm.

Keywords: Working capital management; Cash Conversion Cycle; Tobin Q (search for similar items in EconPapers)
JEL-codes: C22 G39 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2012-04-11

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