The Impact of Working Capital Management on Firm Performance: An Empirical Evidence from the BIST SME Industrial Index

Nowadays, it is crucial to be aware of the impacts of management of working capital indicators on firm performance.In order to figure out the existence of this relationship, there have been many research conducted.In this context, the main aim of this research is to determine the relationship between working capital management and firm performance of twenty-nine of thirty three companies listed on the Borsa Istanbul SME Industrial Index from 2011 to 2014.In this respect, pooled OLS test and cross sectional time series analysis technique is employed.We found negative relationship between Net Margin and, Short Term Debt Turnover Days and Cash Conversion Cycle.It can be interpreted that effective management of working capital, such as decrease in Short Term Debt Turnover Days, can positively affect firms' performance.