Year 2018, Volume 3, Issue 4, Pages 261 - 272 2018-12-30

A Comparison of Working Capital Components of Turkish And Indian Cement Firms

İlker Sakınç [1]

19 71

Working capital management is the management of current assets and current liabilities. It is the main issue for financial managers because there is a close relation between working capital management and profitability. The components of working capital determine the level of profitability and risk of the firm. This study analyzes the comparison of working capital components of two different countries. For this study, Turkish and Indian Cement Industries are selected. According to list of top countries by cement production in 2013 based on USGS Mineral Program Cement Report, India is the second and Turkey is the seventh largest producer of cement in the world. This study indicates the working capital management applications of two different countries. As working capital components, Average Inventory Days, Average Payables Days, Average Net Trade Cycle, Average Receivables Collection Periods, Cash and Equivalent/ Total Assets and Working Capital/ Sales are used. Return on Assets, Return on Equity and Net Profit Margin are used for profitability indicators. The independent ttest is used to compare the means of working capital components of Turkish and Indian Cement firms for a period of 2007-2014.

Cement Industry, Working Capital, T-Test
  • Abbadi, S. M., & Abbadi, R. T. (2012). The Determinants of Working Capital Requirements in Palestinian Industrial Corporations. International Journal of Economics and Finance, 5(1), 65-75.
  • Akinlo, O. O. (2012). Determinants of working capital requirements in selected quoted companies in Nigeria. Journal of African Business, 13(1), 40-50.
  • Archavli, E., Siriopoulos, C., & Arvanitis, S. (2012). Determinants of Working Capital Management. Available at SSRN 2179907.
  • Chiou, J. R., Cheng, L., & Wu, H. W. (2006). The determinants of working capital management. Journal of American Academy of Business, 10(1), 149-155.
  • Deloof, M. (2003). Does working capital management affect profitability of Belgian firms?. Journal of business finance & Accounting, 30(3‐4), 573-588.
  • Demireli, E., Başci, E. S., & Karaca, S. S. (2014). İşletme Sermayesi ve Performans Göstergeleri Arasındaki İlişkiler: Borsa İstanbul Üzerine Bir Uygulama. Ege Stratejik Araştırmalar Dergisi, 5(1), 79-98.
  • Doğan, M., & Elitaş, B. L. (2014). Çalişma Sermayesi Gereksiniminin Belirleyicileri: Borsa İstanbul Gida Sektörü Üzerine Bir İnceleme. World of Accounting Science, 16(2).
  • Dursun, A., & Ayrıçay, Y. (2012). Çalişma Sermayesi-Kârlilik İlişkisinin İmkb Örneğinde 1996-2005 Dönemi Analizi. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 26(3-4).
  • Ganesan, V. (2007). An analysis of working capital management efficiency in telecommunication equipment industry. Rivier academic journal, 3(2), 1-10.
  • Gardner, M. J., Mills, D. L., & Pope, R. A. (1986). Working capital policy and operating risk: An empirical analysis. Financial Review, 21(3), 31-31.
  • Gombola, M. J., and Ketz, J. E. (1983). Financial ratio patterns in retail and manufacturing organizations. Financial Management, 45-56.
  • Gupta, M. C. (1969). The Effect Of Size, Growth, and Industry On The Financial Structure Of Manufacturing Companies. The Journal of Finance, 24(3), 517-529.
  • Gupta, M. C., and Huefner, R. J. (1972). A cluster analysis study of financial ratios and industry characteristics. Journal of Accounting Research, 77-95.
  • Hawawini, G., Viallet, C., & Vora, A. (1986). Industry influence on corporate working capital decisions. MPRA Paper No. 44894.
  • Lamberson, M. (1995). Changes in working capital of small firms in relation to changes in economic activity. American Journal of Business, 10(2), 45-50.
  • Lazaridis, I., & Tryfonidis, D. (2006). Relationship between working capital management and profitability of listed companies in the Athens stock exchange.Journal of financial management and analysis, 19(1).
  • Mansoori, D. E., & Muhammad, D. J. (2012). Determinants of working capital management: Case of Singapore firms, Research Journal of Finance and Accounting, 3(11).
  • Mathuva, D. (2009). The influence of working capital management components on corporate profitability: a survey on Kenyan listed firms. Research Journal of Business Management, 3(1), 1-11.
  • Nazir, M. S., & Afza, T. (2009). Impact of aggressive working capital management policy on firms’ profitability. The IUP journal of applied finance,15(8), 19-30.
  • Öztürk, M. B., & Demirgüneş, K. (2008). İşletme Sermayesi Gereksinimini Etkileyen Değişkenler Üzerine İMKB’de Bir Uygulama. Finans Politik & Ekonomik Yorumlar, 45(516), 47-56.
  • Shin, H. H., & Soenen, L. (1998). Efficiency of working capital management and corporate profitability. Financial practice and education, 8, 37-45.
  • Ugurlu, E., Jindrichovska, I., & Kubickova, D. (2014), Working Capital Management in Czech SMEs: An Econometric Approach. ICESBA, 23-24 Bucharest Romania.
  • Vijayalakshmi, S., & Bansal, N. (2013). Determinants of Working Capital in Cement Industry-A case study of ACC Ltd. Pacific Business Review International, 6(1), 45-50.
  • Weinraub, H. J., and Visscher, S. (1998). Industry practice relating to aggressive conservative working capital policies. Journal of Financial and Strategic Decision, 11(2), 11-18.
Primary Language en
Subjects Management
Journal Section Issues
Authors

Orcid: 0000-0002-9549-8563
Author: İlker Sakınç (Primary Author)
Institution: Hitit Üniversitesi
Country: Turkey


APA Sakınç, İ . (2018). A Comparison of Working Capital Components of Turkish And Indian Cement Firms. Bulletin of Economic Theory and Analysis, 3 (4), 261-272. DOI: 10.25229/beta.487437