ANALYSIS OF THE EFFECT OF CASH CONVERSION CYCLE ON FIRM PROFITABILITY IN THE TECHNOLOGY SECTOR: AN APPLICATION ON BİST

TEKNOLOJİ SEKTÖRÜNDE NAKİT DÖNÜŞÜM SÜRESİNİN FİRMA KÂRLILIĞI ÜZERİNDEKİ ETKİSİNİN ANALİZİ: BİST UYGULAMASI

Abstract

1. LITERATURE 1.1. RESEARCH SUBJECT Many studies in the literature examine the relationship between cash conversion time and profitability. The main reason for this is that it is vital to determine to what extent cash management, which is considered as one of the most important elements of working capital management, affects profitability of companies. In this context, the cash conversion cycle in the literature is examined from various perspectives. Some of the studies focus directly on the relationship between cash conversion cycle and profitability. Another part focuses on its components with cash conversion cycle. In this context, Ege et al. (2016) have obtained evidence that companies within the scope of BİST 50 are successful in cash management. On the other hand, Beyazgül and Karadeniz (2017) have reached the findings that the cash conversion cycle decreases as the firm size increases. The studies in the literature focus more on the relationship between cash conversion cycle and profitability. In this context, Aytekin and Güler (2014); Topaloğlu and Nur (2016); Zakari and Saidu (2016) found a positive relationship between cash relationship between cash conversion time and profitability. profitability in the technology sector. conversion time and profitability. In this context, Aytekin and Güler (2014); Topaloğlu and Nur (2016); Zakari and Saidu (2016) found a positive relationship between cash conversion cycle and profitability. On the other hand, Vergili (2019); Garanina and Petrova (2015); Chang (2018) found a negative 1.2. RESEARCH PURPOSE AND IMPORTANCE After evaluating the literature in general, the purpose of the study should be revealed. This research aims to provide useful information for companies by revealing the cash conversion factors that affect 1.3. CONTRIBUTION of the ARTICLE to the LITERATURE The research is the first study in the literature analyzing the relationship between the cash conversion cycle and profitability in BIST Technology Index (XUTEK). The contribution of the study to the literature can be considered in this context. 2. DESIGN AND METHOD 2.1. RESEARCH TYPE This research uses an empirical method to analyze the relationship between the cash conversion cycle and profitability. The empirical method used in the study is a multiple linear regression model. In this context, various financial ratios were obtained by using the financial table data of the companies included in the BIST Technology Index between 2010-2019. In the research, the receivable collection period, inventory holding period, short term debt payment period, and cash conversion cycle were used as cash conversion factors. In this study, control variables were determined as leverage and size; asset profitability was used as a dependent variable. 2.2. RESEARCH PROBLEMS This research tries to reveal how the increase or decrease in cash conversion cycles of technology companies will affect asset profitability. The main problem of this study can be defined in this way. 2.3. DATA COLLECTION METHOD All of the data used in the study was calculated within the scope of the study. To calculate the financial ratios, the financial statements of the companies analyzed within the scope of the research were used. The financial statements of the companies were obtained from the website of the Turkish Public Disclosure Platform (kap.gov.tr). 2.4. QUANTITATIVE / QUALITATIVE ANALYSIS In the analysis made within the scope of the research, a multiple linear regression model that describes a dependent variable with one or more independent variables is used. The multivariate regression model is seen as an appropriate model by the researchers to show which independent variable explains the dependent variable at a higher rate and to make predictions (Sarıkovanlık et al., 2019: 49). 2.5. RESEARCH MODEL 2.6. RESEARCH HYPOTHESES 3. In the application made within the scope of the research, a regression model was established to analyze the relationship between cash return time and profitability. This model is shown in Formula 1. AK= β0 + β1(LNBUY) + β2(KAL) + β3(LNATS) + β4(LNSTS) + β5(LNKVBÖS) + β6(LNNDS) + εi (1) The basic hypothesis of the model established within the scope of the research is that the decrease of ATS and STS will increase the active profitability; on the other hand, the increase in KVBÖS and NDS variables will increase the asset profitability. Whether the

Özet

Çalışma teknoloji firmalarının nakit dönüşüm süreleri ve bu sür eleri etkileyen unsurları ile kârlılık arasındaki ilişkiyi analiz ederek firmalara işletme sermayesi yönetimi konusunda faydalı bilgiler sağlamayı amaçlamaktadır. Araştırmada veri seti olarak BİST (Borsa İstanbul) Teknoloji Endeksi (XUTEK) kapsamında 2010-2019 yılları arasında faaliyet gösteren firmaların yıllık finansal tablolarından elde edilen oranlar kullanılmıştır. Firmaların nakit dönüşüm süreleri ile kârlılıkları arasındaki ilişkinin analiz edilebilmesi için çoklu doğrusal regresyon modeli kullanılmıştır. Çalışmada alacak tahsil süresi, stok tüketilme süresi ve kaldıraç oranı ile aktif kârlılığı arasında anlamlı ve negatif bir ilişki olduğuna dair bulgular elde edilirken; net satışlar, kısa vadeli borç ödeme süresi ve nakit dönüşüm süresi ile kârlılık arasında pozitif ve anlamlı bir ilişki olduğuna dair bulgular elde edilmiştir.