IDEAS home Printed from https://ideas.repec.org/h/ito/pchaps/120160.html
   My bibliography  Save this book chapter

The Effect of Working Capital Management on Profitability in Emerging Countries: Evidence from Turkey

In: Financial Management from an Emerging Market Perspective

Author

Listed:
  • Samet Evci
  • Nazan Sak

Abstract

This study aims to reveal the tradeoff between working capital components and firm's profitability by using the data of the firms listed on Borsa Istanbul Industry Index in Turkey. Annual data of 41 firms are used for the period 2005-2016 in the study. The working capital components and firm's profitability tradeoff was examined via the fixed effects panel regression model. Dependent variable is defined as return on assets; independent variables are cash conversion cycle, inventory conversion period, and payables deferral period; and control variables are sales growth, the ratio of short-term financial debts to short-term debts, and the ratio of fixed assets to total assets. Findings show the existence of tradeoff working capital management profitability. A negative relationship exists between return on assets and payables deferral period, cash conversion cycle, the ratio of short-term financial debts to short-term debts, and the ratio of fixed assets to total assets while return on assets is positively related to inventory conversion period and sales growth.

Suggested Citation

  • Samet Evci & Nazan Sak, 2018. "The Effect of Working Capital Management on Profitability in Emerging Countries: Evidence from Turkey," Chapters, in: Soner Gokten & Guray Kucukkocaoglu (ed.), Financial Management from an Emerging Market Perspective, IntechOpen.
    • Handle: RePEc:ito:pchaps:120160
    DOI: 10.5772/intechopen.70871
    as

    Download full text from publisher

    File URL: https://www.intechopen.com/chapters/57069
    Download Restriction: no
    File URL: https://libkey.io/10.5772/intechopen.70871?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zaher Abdel Fattah Al-Slehat & Bader Mustafa Al-Sharif, 2019. "Net Working Capital and the Profitability: Empirical Evidence form Amman Stock Exchange," International Business Research, Canadian Center of Science and Education, vol. 12(4), pages 12-20, April.

    More about this item

    Keywords

    working capital management; profitability; panel data analysis; emerging countries; Turkey;
    All these keywords.

    JEL classification:

    • C88 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Other Computer Software
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ito:pchaps:120160. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Slobodan Momcilovic (email available below). General contact details of provider: http://www.intechopen.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.