WORKING CAPITAL MANAGEMENT, PERFORMANCE AND MARKET VALUE OF LOGISTICS COMPANIES LISTED ON BORSA ISTANBUL

Year 2019, BEYKOZ AKADEMİ 2019 ÖZEL SAYI, 86 - 99, 01.10.2019

Narman Kuzucu

https://doi.org/10.14514/byk.m.26515393.2019.sp/86-99

Abstract

In this research, we aim to examine the influence of working capital management on performance and market value of companies in logistics industry. We use a panel data analysis methodology with a data set covering eight logistics companies listed on Borsa Istanbul in the period 2009 to 2018. In order to estimate the relationship between working capital management and performance of companies we use return on assets (ROA) and market to book value (MB) as dependent variables in the research models. The main results indicate that net working capital (NWC) is not related to current year’s profitability, but with a time lag, it is positively related to next year’s profitability. Contrarily, NWC is negatively associated with MB of logistics companies. Financial leverage, which is one the control variables, is found statistically significant, and the relationship between leverage and profitability is negative. Leverage is positively associated with MB. The results suggest that leveraged companies are more likely to obtain less return or to suffer from losses; however, leverage enhances firms’ market value. Considering the limitations related to the research period and the number of logistics firms listed on Borsa Istanbul, the results should be interpreted with some caution.

Keywords

leverage, logistics industry, net working capital, performance, working capital management

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