Cilt 7, Sayı 13, Sayfalar 437 - 448 2015-11-15

THE INTERACTION OF WORKING CAPITAL MANAGEMENT AND PROFITABILITY MEASURES

İlker YILMAZ [1]

244 545

In this article, the interaction between working capital management success and different measures of profitability was examined. When components of net working capital are kept at optimal levels, this situation benefits company to use resources more efficiently and helps profitability. Similarly, high levels of profitability helps avoiding idle working capital practices. By using a sample consisting of 172 non-financial companies traded Borsa Istanbul (BIST) in Turkey, and 5-year data covering 2009-2013, regressions were run to analyze how profitability affects working capital management which is measured in terms of Cash Conversion Cycle (CCC) and also how CCC affects profitability measures. Most of the alternative cases tested have given significant results. Decreasing CCC affect positively profitability measures. Similarly, improved level of profitability helps a better working capital management and affects inventory turnover, receivables collection and payable deferral. Although long-term financial decisions and policies have an important role in the sustainability and profitability of the companies, short-term financial management and working capital management which is the most important policy in this sense can also have a profound effect on the company success

Abstract
In this article, the interaction between working capital management success and different measures
of profitability was examined. When components of net working capital are kept at optimal levels, this
situation benefits company to use resources more efficiently and helps profitability. Similarly, high levels of
profitability helps avoiding idle working capital practices. By using a sample consisting of 172 non-financial
companies traded Borsa Istanbul (BIST) in Turkey, and 5-year data covering 2009-2013, regressions were
run to analyze how profitability affects working capital management which is measured in terms of Cash
Conversion Cycle (CCC) and also how CCC affects profitability measures. Most of the alternative cases tested
have given significant results. Decreasing CCC affect positively profitability measures. Similarly, improved
level of profitability helps a better working capital management and affects inventory turnover, receivables
collection and payable deferral. Although long-term financial decisions and policies have an important role
in the sustainability and profitability of the companies, short-term financial management and working capital
management which is the most important policy in this sense can also have a profound effect on the company
success.
Keywords: Working capital, profitability, liquidity
Jel Codes: G30, L25, C23

 

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Yazar: İlker YILMAZ
E-posta: ilker.yilmaz@nisantasi.edu.tr

Bibtex @ { marufacd4632, journal = {Finansal Araştırmalar ve Çalışmalar Dergisi}, issn = {1309-1123}, address = {Marmara Üniversitesi}, year = {2015}, volume = {7}, pages = {437 - 448}, doi = {10.14784/jfrs.69165}, title = {THE INTERACTION OF WORKING CAPITAL MANAGEMENT AND PROFITABILITY MEASURES}, language = {tr}, key = {cite}, author = {YILMAZ, İlker} }
APA YILMAZ, İ . (2015). THE INTERACTION OF WORKING CAPITAL MANAGEMENT AND PROFITABILITY MEASURES. Finansal Araştırmalar ve Çalışmalar Dergisi, 7 (13), 437-448. DOI: 10.14784/jfrs.69165
MLA YILMAZ, İ . "THE INTERACTION OF WORKING CAPITAL MANAGEMENT AND PROFITABILITY MEASURES". Finansal Araştırmalar ve Çalışmalar Dergisi 7 (2015): 437-448 <http://e-dergi-marmara.dergipark.gov.tr/marufacd/issue/510/4632>
Chicago YILMAZ, İ . "THE INTERACTION OF WORKING CAPITAL MANAGEMENT AND PROFITABILITY MEASURES". Finansal Araştırmalar ve Çalışmalar Dergisi 7 (2015): 437-448
RIS TY - JOUR T1 - THE INTERACTION OF WORKING CAPITAL MANAGEMENT AND PROFITABILITY MEASURES AU - İlker YILMAZ Y1 - 2015 PY - 2015 N1 - doi: 10.14784/jfrs.69165 DO - 10.14784/jfrs.69165 T2 - Finansal Araştırmalar ve Çalışmalar Dergisi JF - Journal JO - JOR SP - 437 EP - 448 VL - 7 IS - 13 SN - 1309-1123- M3 - doi: 10.14784/jfrs.69165 UR - http://dx.doi.org/10.14784/jfrs.69165 Y2 - 2017 ER -
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