Measuring working capital activity levels using the Index Method: An application at Borsa Istanbul

In order for businesses to sustain their operations, determining the level of investment in current assets and the financing methods for these investments is of significant importance within the scope of working capital management. Various methods have been employed in the literature to measure the efficiency of working capital. This thesis aims to evaluate the working capital efficiency of companies listed in the Borsa Istanbul (BIST) Chemicals, Pharmaceuticals, Petroleum, Rubber, and Plastic Products Sector by utilizing the Index Method. For this purpose, the index method developed by Bhattacharya (1997) was applied, and the usage index, performance index, and efficiency index values were calculated based on data from 44 companies operating in the sector for the period 2015–2023. Although the initial sample comprised 44 companies, due to data unavailability and failure to meet the necessary analytical criteria, only 25 companies with continuous operations during the relevant period were included in the final analysis. The results indicate that 17 of these 25 companies had index values exceeding 1. In terms of the usage index, the most efficient company was identified as EGGUB; regarding the performance index and efficiency index, BAGFS ranked first in both categories.