The research done by Herrfeldt B., “How to understand Working Capital Management” describe that “Cash is king” so say the money managers who share the responsibility of running this country’s businesses. And with banks demanding more from there prospective borrowers, greater emphasis has been placed on those accountable for so-called working capital management. Working capital management refers to the management of current or short – term assets and short – term liabilities. In essence, the purpose of that function is to make certain that the company has enough assets to operate its business.
The research done by, Samiloglu F. and Demirgunes K., “Effect of Working Capital Management on firm Profitability : Evidence of Turkey” (2008) describe that the effect of working capital management on firm profitability. In accordance with this aim, to consider statistical significance relationship between firm profitability and the component of cash conversion cycle at length a sample consisting of Istanbul Stock Exchange (ISE) listed manufacture firms for the period of 1998-2007 has been analyzed under multiple regression models. Empirical findings the study show that accounts receivable period, inventory period and leverage affect firms profitability negatively; while growth (in sales) affects on firm profitability positively.
Michael J Peel, Nicholas Wilson (2008), very little research has been conducted on the capital budgeting and working capital practices of small firms. The result of survey indicates that a relatively high proportion of small firm in the sample claimed to use quantitative capital budgeting and working capital technique and to review various aspect of the companies’ working capital. In addition, the firms which claim to use quantitative capital budgeting and working capital technique and to review various aspects of their companies’ working capital. In addition, the firms which claim to use more sophisticated...
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