The effect of working capital management on firm performance: An application on BIST informatics sector

Even though business enterprises make large amounts of asset investments, they need working capital investments. Beside the continuity of business activities, working capital which is required to meet debts and obligations, refers to business investments that have the ability to turn into money in a shorter term than a year. In this research done to evaluate the relationship between the working capital and business performance, quartly data between 2011Q1-2018Q2 of firms that carry on business in BIST informatics sector has been used. In the research, a regression model has been created for each dependent variable representing the business performance in various aspects. Among the models in question, Model-1 and Model-2 focus on the profitability performances of businesses, Model-3 focus on their growth performances, Model-4 focus on their market performances and Model-5 focus on the performance of their activities. According to findings obtained from the panel data analysis of five regression models created, it is determined that from independent variables representing the working capital management, the current ratio has a meaningful relationship only with the asset turnover from dependent variables. It has not been reached any meaningful relationship in any model between the other independent variable, stock dependency ratio and dependent variables. It is thought that this case has been caused by sectoral conditions and the structure of financial statements of some business enterprises. It has been determined that working assets turnover rate has caused a meaningful effect on the five dependent variables in the BIST informatics sector representing the business performance.