英语论文网

ce the technical insolvency in the short run, or even the ultimate bankruptcy if such state of poor cash management persists and remains unresolved for excessively long period of time. So it can be established that liquidity management is important to maintain adequate profitability as well as the survival of the firm (Uyar, 2009).

The Corporate liquidity can be assessed in the context of two different aspects: static or dynamic (Lancaster et al., 1999; Farris and Hutchison, 2002; Moss and Stine, 1993and Uyar, 2009). The first static aspect based view relates to the use of conventional ratios like working capital ratios and liquidity ratios. These various ratios are deployed to gauge or measure the liquidity of the firm at a specific point in time whereas the dynamic view takes into account the firm's ongoing or concurrent liquidity position based on firm's operations. So the CCC days is the very outcome of this dynamic view of cash management on the part of the firm. Moss and Stine (1993) found firm size to be an important factor towards the CCC days. They showed that the larger the size of the firms; the shorter is the CCC turnover in days. They also found a significant a positive relationship of the CCC when compared to the working capital ratios. The previous researchers have found a significant and negative relationship between profitability and the length of CCC (Jose et al., 1996; Eljelly, 2004; Uyar 2009).

Deloof (2003) investigated the effect of working capital management on corporate profitability of Belgian firms using the sample of 1,009 large Belgian non-financial firms for the tenure of 1992-1996. Trade credit and inventory policies are measured by average collection period, average age of inventory and payable deferral period. Working capital management is measured through cash conversion cycle. Their findings suggest that managers can increase corporate profitability by reducing the average collection period and average age of inventory and by increasing the period to pay their obligations.

Samiloglu and Demirgunes (2008) analyzed the effect of working capital management on the firms profitability of the Turkey manufacturing firms listed in the Istanbul Stock Exchange (ISE) for the period of 1998-2007 using the multi regression model for the analysis. Empirical findings showed the results that receivable conversion period, inventory conversion period and leverage affects negatively on the firm profitability, while growth in sales affects firm profitability positively.

Karaduman, Akbas, Ozsozgun and Durer (2010) studied the effect of working capital management on profitability using the panel data study for the period of 2005-2008 of the companies listed in Istanbul Stock Exchange and said that working capital management is the most fundamental driver of firms market value because it directly affects profitability and is also very crucial from the firms point of sustainability. So the firms should develop the well balance between the profitability and risk when it comes to working capital management.

Zarivawati and et al (2009) analyzed the WCM and corporate performance of the six different economic sectors listed in Bursa Malaysia using a panel data of 1628 firm for the year of 1996-2006 and reported a strong negative relationship between cash conversion cycle and firm profitability.

Wongthatsanekorn (2010) investigated the CCC mana