Affects of Working Capital Management on Firm's Performance: Evidence from Turkey
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 at...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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EconJournals
2012-09-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://www.econjournals.com/index.php/ijefi/article/view/312 |
| _version_ | 1797921690428112896 |
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| author | Gamze Vural Ahmet Gökhan Sökmen Emin Hüseyin Çetenak |
| author_facet | Gamze Vural Ahmet Gökhan Sökmen Emin Hüseyin Çetenak |
| author_sort | Gamze Vural |
| collection | DOAJ |
| description |
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
JEL Classifications: G39; C22
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| first_indexed | 2024-04-10T14:19:28Z |
| format | Article |
| id | doaj.art-4bdb2f7b783447a7957ac94842cf8659 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T14:19:28Z |
| publishDate | 2012-09-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-4bdb2f7b783447a7957ac94842cf86592023-02-15T16:09:21ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382012-09-0124Affects of Working Capital Management on Firm's Performance: Evidence from TurkeyGamze Vural0Ahmet Gökhan Sökmen1Emin Hüseyin Çetenak2Cukurova UniversityCag UniversityCukurova University 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 JEL Classifications: G39; C22 https://www.econjournals.com/index.php/ijefi/article/view/312 |
| spellingShingle | Gamze Vural Ahmet Gökhan Sökmen Emin Hüseyin Çetenak Affects of Working Capital Management on Firm's Performance: Evidence from Turkey International Journal of Economics and Financial Issues |
| title | Affects of Working Capital Management on Firm's Performance: Evidence from Turkey |
| title_full | Affects of Working Capital Management on Firm's Performance: Evidence from Turkey |
| title_fullStr | Affects of Working Capital Management on Firm's Performance: Evidence from Turkey |
| title_full_unstemmed | Affects of Working Capital Management on Firm's Performance: Evidence from Turkey |
| title_short | Affects of Working Capital Management on Firm's Performance: Evidence from Turkey |
| title_sort | affects of working capital management on firm s performance evidence from turkey |
| url | https://www.econjournals.com/index.php/ijefi/article/view/312 |
| work_keys_str_mv | AT gamzevural affectsofworkingcapitalmanagementonfirmsperformanceevidencefromturkey AT ahmetgakhansakmen affectsofworkingcapitalmanagementonfirmsperformanceevidencefromturkey AT eminhuseyincetenak affectsofworkingcapitalmanagementonfirmsperformanceevidencefromturkey |