The Impacts of Changes in Macro-Economic Data on Net Working Capital: The Case of Turkey's Industrial Sector


ÇELİK R. , Bilen B., Bilen O.

5th Istanbul Conference of Economics and Finance, İstanbul, Turkey, 6 - 07 June 2016, vol.38, pp.122-134 identifier identifier

  • Publication Type: Conference Paper / Full Text
  • Volume: 38
  • Doi Number: 10.1016/s2212-5671(16)30184-8
  • City: İstanbul
  • Country: Turkey
  • Page Numbers: pp.122-134
  • Keywords: Net Working Capital, Macro-economic Variables, Time Series Analysis

Abstract

Ability to pay of a company's short term liabilities is closely related to its strong liquidity structure. One of the most important factors affecting the liquidity of a company is operating cycle. The main factors that determine the operating cycle of the company is its stock supply term, production stage time and debt payment due. These factors determine the amount of net working capital. Net working capital is calculated by subtracting current liabilities from short term liabilities and the management of net working capital is extremely important for the liquidity of a company. Many businesses may have financial difficulty even go bankrupt tragically due to miscalculation net working capital need or incorrect financial resources to finance to the net working capital need. In this study, it is intended to analyse the effects of changes in macroeconomic data over net working capitals of enterprises. For this purpose it has been calculated net working capital of the industrial market by using its sectoral balance sheet which was issued by Central Bank of the Turkish Republic for period of 1996-2014. The later it has been determined positive and negative trends of sector's net working capital by years and modelled for inflation, exchange rates and interest rates to determine if these macro-economic variables effect on net working capital of the industrial market. (C) 2016 The Authors. Published by Elsevier B.V.