Deferment of payments to suppliers can enable the firm to evaluate the product bought and may be a cheap and flexible funding source.
But, postponing payments can be expensive, if the firm has got a discount for early payment .
A firm can collect its receivables in a short time and restrict credit sales to reduce account receivables and increase cash inflows.
However, rigid sales policies and low credit sales would lead to loss of sales, thus causing profits to fall .
WCM is important due to the effect on profitability of firm, firm’s risk, and the firm value .
Literature Review Of Working Capital Management Good Argumentative Essay Sample
In this context, this study aims to reveal the tradeoff between WCC and firm’s profitability by using the data of the firms listed on Borsa Istanbul (BIST) Industry Index in Turkey.
Global economic integration for developing countries through economic liberalization and democratization is accepted as the best way to overcome destitution and discrimination .
At this point, the industry sector plays a significant role.
The financing problem is one of the most important problems faced by these firms.
These firms need to be able to use their existing resources effectively and be self-sufficient because of the scarcity of funding resources and the insufficient accumulation of capital.