Effect of working capital and financial decision making management on profitability of listed companies in Tehran’s securities exchange

Year 2015, Volume: 36 Issue: 3, 4322 - 4330, 13.05.2015

Masoomeh Shahnazı , Keyhan Azadı

Abstract

Abstract. Working capital management is one important part of financial management, because it directly affects corporate profitability and its goal is to establish a critical equivalence between maintaining liquidity for supporting daily operations and maximization of short- term investment opportunities. So, managers should consider decisions related to finance and effects that these factors have on capital structure up to can acquire enough earnings for securing appropriate return for investors and trusters. Present research is searching for studying effect of working capital and financial decision making management on profitability of listed companies in Tehran’s securities exchange. In this direction, all listed companies in bourse during time period 2009-2013, were investigated that after systematic deletion of some corporate, regarding contracted defaults, numbers of 141 companies were studied as a sample. Research findings show that there is a meaningful relation between decision making about corporate finance and working capital composition .And also combination of working capital and decision making for corporate finance, each independently has effect on corporate profitability, but combinational reaction of working capital and corporate debt ratio does not have meaningful relation on corporate profitability.

Keywords

Working capital management, financial decision-making, profitability, Financing

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