The impact of working capital management on firm profitability(return on assets) in different business cycles

between working capital management and company profitability and the impact of business cycles (downturns and booms) on the relationship between these two variables.in order to measure the working capital management, the four criteria of cash conversion cycle, payable period, receivables collection period and inventory turnover period, and in order to measure the profitability, the two criteria of return on assets and return on financial element assets have been used. To test the hypotheses, ۱۰۷ companies were selected from the listed companies in Tehran Securities Exchange by systematic method during the years of ۱۳۸۵ to ۱۳۹۲ and the research variables were analyzed using Excel and Eviews software and Panel data model. The results of obtained from investigating the hypotheses confirm the negative relationship between cash cycle and receivables collection period with profitability. Inventories relationship was significant and positive with profitability and was different from the expected result (Significant positive) which led to the rejection of the hypothesis. There was no significant relationship between payable periods and profitability. To investigate the effect of business cycles on the relationship between these variables, the study period, according to market returns, divided into two periods downturns and boombs, the results show the impact of downturns on the relationship between these variables.

Keywords:

working capital management , cash conversion cycle , payable period , receivables collection period , inventories conversion period , profitability , business different cycles , مدیریت سرمایه در گردش , بازده دارایی ها , بازده ناخالص دارایی های غیرمالی , دوره رکود , دوره رونق