Evaluation the impact of working capital management on firms performance (case study: firms accepted in Tehran stock exchange)
Journal Title: International Research Journal of Applied and Basic Sciences - Year 2013, Vol 6, Issue 12
Abstract
The purpose of this paper is to examine the effect of working capital management on firms’ performance for a sample of firms listed on a small emerging market, namely Tehran Stock Exchange. The paper includes a conceptual as well as empirical analysis, in which data from a sample of listed firms for the period from 2006 to 20011 are analyzed to examine if more efficient working capital management improves firms’ accounting profitability and firms’ value. Cash conversion cycles as well as its components are used as measures of working capital management skills. In this study, two performance measures are used: one accounting and one market measure, believing that wealth maximization is shareholders’ main concern. To bring up more robust results, this study used more than one estimation technique, including panel data analysis, fixed and random effects, and generalized methods of moments. Using robust estimation techniques this study found that profitability is affected positively with the cash conversion cycle. This indicates that more profitable firms are less motivated to manage their working capital. In addition, financial markets failed to penalize managers for inefficient working capital management in emerging markets. The paper’s originality and value lies in suggesting that policy makers in emerging markets need to motivate and encourage managers and shareholders to pay more attention to working capital through improving investors’ awareness and improving information transparency.
Authors and Affiliations
Mohsen Mohammad Nourbakhsh Langroudi| Assistant Professor in Accounting, Islamic Azad University, Shaer Biabani| Assistant Professor in Accounting, Islamic Azad University, Mehrdad Kakaali Somesaraei| M.A in Accounting, Islamic Azad University
Keywords
Related Articles
- EP ID EP6338
- DOI -
- Views 280
- Downloads 7
The relationship between social capital and knowledge sharing in the Ministry of Culture and Islamic Guidance (Iran)
The aim of this study was to investigate the relationship between social capital and knowledge sharing is the Ministry of Culture and Islamic Guidance. They are descriptive correlation study. The study sample consisted o...
Relations between Unconditional and Conditional Accounting Conservatism with Bankruptcy Risk in Companies Listed in Tehran Stock Exchange
There are several Theory and empirical evidence About the informational role of accounting conservatism and it desired impacts in the interests providers of Corporate Capital Suppliers. The main objective of this study i...
Synthesis, Characterization, Theoretical And Antimicrobial Evaluation Of New Co(Ii) , Ni(Ii) And Cu(Ii) Complexes Of Flavylium Salt
Two ligands were prepared and spectroscopic method and elemental analysis verified their structures. One of the ligands L1 is flavylium salt and the second L2 is a chalcone. Reaction between transition metal salts and th...
The trace at darkness, a historical and autobiographic roman
Marguerite Yourcenar searched for finding the human difficulty source at a far past. Going out of blackness it is the first one of workers of this classical contemporarily age. At this Roman she introduces the intellectu...
The role of land use and slope in soil erosion coefficient at water farming
Erosion is a complex factor of soil properties impacts and the interactions between them. Many efforts have been made in order to demonstrate the ability of soil based on soil measurable characteristics in laboratory wit...