Submitted by: Submitted by nizam2012
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Category: Business and Industry
Date Submitted: 10/17/2012 11:50 PM
INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCE STUDIES
Vol 2, No 2, 2010 ISSN: 1309-8055 (Online)
EFFECTS OF WORKING CAPITAL MANAGEMENT ON PROFITABILITY: THE
CASE FOR SELECTED COMPANIES IN THE ISTANBUL STOCK EXCHANGE (20052008)
Hasan Agan KARADUMAN
Yıldız Technical University
Faculty of Economics and Administrative Sciences
Department of Economics, Beşiktas, Istanbul, Turkey
E-mail: hagan@yildiz.edu.tr
Halil Emre AKBAS
Yıldız Technical University
Faculty of Economics and Administrative Sciences
Business Administration Department, Beşiktas, Istanbul, Turkey
E-mail: eakbas@yildiz.edu.tr
Arzu OZSOZGUN
Yıldız Technical University
Faculty of Economics and Administrative Sciences
Business Administration Department, Beşiktas, Istanbul, Turkey
E-mail: ozsozgun@yildiz.edu.tr
Salih DURER
Yıldız Technical University
Faculty of Economics and Administrative Sciences
Business Administration Department, Beşiktas, Istanbul
E-mail: durer@yildiz.edu.tr
Abstract
Working capital management is one of the essential determinants of firms’ market value because it
directly affects profitability. And, working capital management is also extremely crucial from the
point of firms’ sustainability. Hence, firms should establish a fine balance between profitability
and risk when it comes to managing working capital. This paper mainly aims to provide some
empirical evidence on the effects of working capital management on the profitability of selected
companies in the Istanbul Stock Exchange for the period of 2005-2008. The panel data methods
are employed in order to analyze the mentioned effects.
Key Words:
Working capital management, profitability.
JEL Classification: G29, G39
1. INTRODUCTION
Traditionally corporate finance involves decisions about three fields: capital budgeting, capital
structure and working capital management. To handle capital budgeting and capital structure is
about the management of long-term capital and attracts more attention...