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It is anticipated that the study will contribute to the literature in terms of comparing the relationship between the WCM and profitability of industrial firms of emerging countries like Turkey.It is thought that the study with these aspects will be beneficial to both managers and researchers.A firm can collect its receivables in a short time and restrict credit sales to reduce account receivables and increase cash inflows.
In this case, the industry sector will remain important for the Turkish economy in the future.
The industry sector, which plays a key role in the Turkish economy, is faced with many problems such as lack of qualified workforce, inadequacy of infrastructure and technology, weak competition power, and difficulties in marketing and financing.
According to the World Bank data, the industry sector’s share in GDP is 32% .
The share of the industry sector in exports is around 92% .
In this context, firms that invest heavily in inventory and accounts receivables may be exposed to low profits .
Literature Review Of Working Capital Management
Another component that has an impact on the working capital requirement is accounts payables.
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.
This study, which investigates the impact of the WCM on the profitability of Turkish industrial firms, is considered to contribute on the determination of working capital investment levels of these firms, determination of the distribution among the working capital components, effective use of scarce resources, and resource supply and sustainability of future investments by applying a working capital that will increase the profitability.
There are a number of studies covering the developed countries in the literature, while there are limited studies covering the emerging countries.