Importance of cash manegement in businesses and cash effect of conversion cycle on business profitability: An application in BİST

Cash management is a term of working capital which has importance on the financial management of business. In the academic field, there is a wide range of studies on cash management and cash conversion cycle. The aim of this study is to determine the relationship between cash conversion time and its components and profitability by using average data of 42 enterprises in Bist-50 index between 2015-2017. According to the findings of the study, a negative correlation was found between cash conversion time and operating profitability. Moreover a positive correlation was found between the duration of current liabilities and the average consumption time of the inventories with operating profitability. Also, it was found that the average collection time of receivables and duration of current liabilities have negative effect on net profitability. Finally, a negative correlation was found between average collection time of receivables and return on asset. Keywords: Cash Conversion Cycle, Cash Management, Bıst-50 Index.