WORKING CAPITAL MANAGEMENT & PROFITABILITY

JIBANANDA SAMAL 31 MANOJ KUMAR PRADHAN 37 SOUVESH SHUBY JENA - 51

CONTENTS
The Factors in management of working capital The Paper The Effect of Working Capital Management on Firm Profitability: Evidence from Turkey The Paper The Relationship Between Working Capital Management And Profitability Evidence From The United States Comparison of the two views.

The Effect of Working Capital Management on Firm Profitability: Evidence from Turkey F Samilpglu and K Demirgunes
Depart ment of Business Adminstration, University of Aksaray, Turkey Depart ment of Business Adminstration, University of Nigde, Turkey

The Relationship Between Working Capital Management And Profitability Evidence From The United States Amarjit Gill, Nahum Biger, Neil Mathur
College of Business Administration, TUI University, CA 90630, USA Academic Center Carmel, Shaar Palmer 4, Haifa, Israel 33031 Simon Fraser University, 515 West Hastings Street, Vancouver, BC V6B-5K3, Canada

FACTORS IN WORKING CAPITAL

The way that components of wc is managed has a significant impact on profitability of firms

Evidence from Turkey

Study was conducted to investigate the effect of working capital management on firm profitability A sample of Istanbul Stock Exchange listed manufacturing companies for the period of 1998-2007 was taken Quarterly financial statements of listed companies were taken from ISE data base Multiple regression analysis of 5843 firms were done Total seven independent variables were taken for the study

Evidence form USA

It was seen from the previous literature reviews, that there is impact of WC management on firms profitability. Still there still is ambiguity regarding the appropriate variables that might serve as proxies for working capital management. Hence the study was done to investigates the relationship between a set of such variables and the profitability of a sample of American manufacturing firms. A sample of 88 American manufacturing companies listed on the New York Stock Exchange for the period of 3 years from 2005-2007 was taken

AR = Accounts receivables AP = Accounts payables INV = Inventory CCC = Cash conversion cycle LnS = Firm size FD = Financial debt ratio FFA = Fixed financial asset ratio Firm size, financial debt ratio, and fixed financial asset ratio were used as control variables.

STATISTICAL RESUTS

COMPARISION BETWEEN BOTH STUDY

TURKEY STUDY ACRP, INVP & LEV HAS significant negative relationship between profitability. Firms growth has positively significant relationship with profitability CCC, SIZE & FIX have no significant affect on profitability. USA STUDY Account receivables has negative relationship with profitability No statistically significant relationship between days of accounts payable and profitability of the firm. Positive relationship between cash conversion cycle and gross operating profit No significant relationship between firm size and its gross operating profit ratio.