The relationship between working capital management and criterions for value-based performance of the companies listed in Tehran Stock Exchange
AbstractThis study aims at exploring relationship between Working Capital Management with criterions for value-based performance.Methodology: Therefore, the information of 107 companies listed in Tehran Stock Exchange between 2007-2011 was studied and the effect of various variables for Working Capital Management (including Days Sales Outstanding, Days Sales of Inventory, Days Payable Outstanding, and Cash ConversionCycle) on criterions for value-based performance (including Economic Value-Added (EVA), Market Value-Added (MVA), and Q Tobin index) was tested through employing 3 hypotheses and 9 sub-hypotheses all along with the main research question. Results: Test of hypothesis was carried out by multiple regression analysis byEstimatedgeneralized least square (EGLS). Conclusion: Findings of the study show that the increase of Days Sales Outstanding results in the increase of both Economic Value-Added (EVA) and Market Value-Added (MVA), and the increase of Days Sales of Inventory also results in the decrease of criterion for value-based performance of both Economic Value-Added (EVA) and Market Value-Added (MVA).
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