چکیده:
This study examines the relationship between working capital management and profitability in Lavan Oil Refining Company, has paid to this, Lavan Refinery Company's financial statements from 1390 to first quarter of 1395 (Persian date) were studied. In this study the effect of different variables, including average collection period of receivables, working capital, inventory turnover period, the average duration of debt and the cash conversion cycle on company's operating profit have studied. Current ratio, debt ratio and the sales are used as control variables. To analyze the relationship, Pearson correlation and regression were used. The results suggest that there are meaningful relationships between working capital management and profitability. An increase in receivables collection period, increases the profitability but increase in debt payment period, inventory turnover and cash cycle, will decline the profitability.
خلاصه ماشینی:
The Relationship between Working Capital Management and Profitability (Case Study: Lavan Oil Refining Company) Ali Eshaghzade1*, Ali Elmi2 1- Master student of financial management, Tehran Petroleum University of Technology 2- Student of accounting, Tehran Petroleum University of Technology *Ali_eshaghzade@yahoo.
com Received: June 2017 Accepted: July 2017 Abstract This study examines the relationship between working capital management and profitability in Lavan Oil Refining Company, has paid to this, Lavan Refinery Company's financial statements from 1390 to first quarter of 1395 (Persian date) were studied.
In this study the effect of different variables, including average collection period of receivables, working capital, inventory turnover period, the average duration of debt and the cash conversion cycle on company's operating profit have studied.
Control variables: This study sought to examine the relationship between working capital management and profitability in Lavan Oil Refining Company.
4 as following: EBIT = β0 + β1 (CCC) + β2(CR) + β3 (DR) + β4 (S) + ε (4) Where EBIT stands for earnings before interest and tax; CCC for Cash conversion cycle (as an independent variable is obtained from deducting the solvency from the total volume of collection of receivables and inventory turnover period, in other words: CCC = DSO + ITID – APP); CR for current ratio (current assets divided by current liabilities); DR for debt ratio (total debts divided by total assets); S for net sale of company in term of dollar amounts and finally ε for model residuals.