Impact of Working Capital Management on Firm Profitability in Business Cycles

The recent economic recession has led to re-focusing on working capital management policies in firms. This paper examines the importance of business cycles on the relationship between working capital and profitability of firms. To proceed, we tested the hypotheses in a sample of 120 firms listed in...

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Autores principales:	Nasrin Yousefzadeh, Zeinab Aazami
Formato:	article
Lenguaje:	FA
Publicado:	Shahid Bahonar University of Kerman 2016
Materias:	working capital profitability business cycles Accounting. Bookkeeping HF5601-5689
Acceso en línea:	https://doaj.org/article/3817045a0d594ea99b43dd90908e6d0f
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id	oai:doaj.org-article:3817045a0d594ea99b43dd90908e6d0f
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spelling	oai:doaj.org-article:3817045a0d594ea99b43dd90908e6d0f2021-11-04T19:49:25ZImpact of Working Capital Management on Firm Profitability in Business Cycles2008-89142476-292X10.22103/jak.2016.1431https://doaj.org/article/3817045a0d594ea99b43dd90908e6d0f2016-02-01T00:00:00Zhttps://jak.uk.ac.ir/article_1431_ea31485c680cfdc7c96af828b543553d.pdfhttps://doaj.org/toc/2008-8914https://doaj.org/toc/2476-292XThe recent economic recession has led to re-focusing on working capital management policies in firms. This paper examines the importance of business cycles on the relationship between working capital and profitability of firms. To proceed, we tested the hypotheses in a sample of 120 firms listed in the Tehran Stock Exchange in the period 1999-2012, using multivariate regression model. The results showed that there is negative relationship between cash conversion cycle and profitability of the firms. Also, it was found that the impact of business cycles on the relationship between working capital and profitability during recession periods is relatively higher, compared with boom periods. Additionally, the results indicated that the impacts of inventory management, and receivables conversion period as well as debt paying period (as the three components of cash conversion cycle) on profitability increase in recession period.Nasrin YousefzadehZeinab AazamiShahid Bahonar University of Kermanarticleworking capitalprofitabilitybusiness cyclesAccounting. BookkeepingHF5601-5689FAمجله دانش حسابداری, Vol 6, Iss 23, Pp 147-171 (2016)
institution	DOAJ
collection	DOAJ
language	FA
topic	working capital profitability business cycles Accounting. Bookkeeping HF5601-5689
spellingShingle	working capital profitability business cycles Accounting. Bookkeeping HF5601-5689 Nasrin Yousefzadeh Zeinab Aazami Impact of Working Capital Management on Firm Profitability in Business Cycles
description	The recent economic recession has led to re-focusing on working capital management policies in firms. This paper examines the importance of business cycles on the relationship between working capital and profitability of firms. To proceed, we tested the hypotheses in a sample of 120 firms listed in the Tehran Stock Exchange in the period 1999-2012, using multivariate regression model. The results showed that there is negative relationship between cash conversion cycle and profitability of the firms. Also, it was found that the impact of business cycles on the relationship between working capital and profitability during recession periods is relatively higher, compared with boom periods. Additionally, the results indicated that the impacts of inventory management, and receivables conversion period as well as debt paying period (as the three components of cash conversion cycle) on profitability increase in recession period.
format	article
author	Nasrin Yousefzadeh Zeinab Aazami
author_facet	Nasrin Yousefzadeh Zeinab Aazami
author_sort	Nasrin Yousefzadeh
title	Impact of Working Capital Management on Firm Profitability in Business Cycles
title_short	Impact of Working Capital Management on Firm Profitability in Business Cycles
title_full	Impact of Working Capital Management on Firm Profitability in Business Cycles
title_fullStr	Impact of Working Capital Management on Firm Profitability in Business Cycles
title_full_unstemmed	Impact of Working Capital Management on Firm Profitability in Business Cycles
title_sort	impact of working capital management on firm profitability in business cycles
publisher	Shahid Bahonar University of Kerman
publishDate	2016
url	https://doaj.org/article/3817045a0d594ea99b43dd90908e6d0f
work_keys_str_mv	AT nasrinyousefzadeh impactofworkingcapitalmanagementonfirmprofitabilityinbusinesscycles AT zeinabaazami impactofworkingcapitalmanagementonfirmprofitabilityinbusinesscycles
_version_	1718444584329019392

Impact of Working Capital Management on Firm Profitability in Business Cycles

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