EFFECT OF WORKING CAPITAL MANAGEMENT ON FIRM PERFORMANCE

Abstract

Purpose- This study aims to examine the impact of working capital management on firm performance using panel data analysis and BIST 100 company data. Methodology- The dependent variable is return on assets (ROA), while the independent variables are the cash conversion cycle (CCC) and firm size. By analyzing a comprehensive dataset, which includes financial information of companies listed on the BIST 100, this research investigates how efficiently firms manage their working capital and the subsequent effect on their performance. Findings- The panel data analysis allows for a robust examination of the relationship, considering both time-series and cross-sectional variations in the data. Conclusion- The findings of this study have significant implications for practitioners and policymakers as they shed light on the importance of working capital management in enhancing firm performance. Moreover, by examining the impact of CCC and firm size, the study provides valuable insights into the specific factors that contribute to the relationship between working capital management and firm performance in the context of the BIST 100 companies. Keywords: working capital management, firm performance, BIST 100, panel data analysis JEL Codes: M41, M42