The Effect of Working Capital Management on the Decisions of Financial Provision and Profitability

Iranian 14th National Conference on Accounting , Urmia University, June 5-6th, 2016

13 Pages Posted: 13 Jun 2016 Last revised: 27 Dec 2018

See all articles by Amir Shams Koloukhi

Amir Shams Koloukhi

Islamic Azad University - Young Researchers and Elites Club

Mohammad hossein Vadiei

Ferdowsi University of Mashhad (FUM)

Ali Taghavi Moghaddam

Islamic Azad University (IAU)

Dr.Hossein Parsian

Plan and Budget organization of Iran

Date Written: May 25, 2016

Abstract

This study examines the correlation between working capital management and debit structure of the firms and the effect of this correlation on the firms’ profitability. If cash flow is the preferred source for financial provision of investments in the projects, it mediates the structure and combination of working capital. The cross-sectional data was in the form of time series, collected from 112 listed firms in Tehran Stock Exchange from 2009-2003. Panel data method and ANOVA estimator were used for model evaluation. Results showed a significant correlation between financial provision decisions and working capital management. Also, financial provision decisions and working capital management have a positive effect on profitability.

Keywords: Working Capital Management, Financial Provision Decisions, Debt Structure, Profitability

JEL Classification: G32, G11, H63

Suggested Citation

Shams Koloukhi, Amir and Vadiei, Mohammad hossein and Taghavi Moghaddam, Ali and Parsian, Hossein, The Effect of Working Capital Management on the Decisions of Financial Provision and Profitability (May 25, 2016). Iranian 14th National Conference on Accounting , Urmia University, June 5-6th, 2016 , Available at SSRN: https://ssrn.com/abstract=2794369

Amir Shams Koloukhi (Contact Author)

Islamic Azad University - Young Researchers and Elites Club ( email )

Torbat-e-Jam Branch
Torbat-e-Jam
Iran

Mohammad hossein Vadiei

Ferdowsi University of Mashhad (FUM) ( email )

P.O. Box 91775-1163
Mashhad
Iran

Ali Taghavi Moghaddam

Islamic Azad University (IAU) ( email )

Hamedan, Iran
Iran
Tehran, Isfahan 461-15655
Iran

Hossein Parsian

Plan and Budget organization of Iran ( email )

Tehran, Tehran
Iran

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