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
Date Written: May 25, 2016
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: Suggested Citation