THE EFFECT OF THE CASH CONVERSION CYCLE ON PROFITABILITY IN TEHRAN STOCK EXCHANGE

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1 ISSN: X & E-ISSN: , Volume, Issue, 202, pp Available online a hp:// THE EFFECT OF THE CASH CONVERSION CYCLE ON PROFITAILITY IN TEHRAN STOCK EXCHANGE ERAHIM AASI AND SAID ALI HASHEMI OSRA Al Zahra Universiy, Iran *Corresponding Auhor: - abbasiebrahim2000@yahoo.com. Received: December 5, 20; Acceped: January 6, 202 Absrac- The purpose of his sudy is inveaing he effec of he cash conversion cycle componens on he operaional gross profi o asses raio. To his purpose 2 firms financial daa is gahered from Tehran sock exchange for he period of he cash conversion cycle componens and 2 conrol variables enered o he five regression model. The resul of firs model es demonsrae ha when all of he cash conversion cycle componens enered o he model, he ne cash conversion cycle and he number of days invenory holding did no have nifican effec bu number of days receivable accouns and number of days payable accouns had nifican negaive effec on operaional gross profi o asses raio. The resul of 2-5 models es demonsraes ha each componens of he cash conversion cycle alone had nifican negaive effec on operaional gross profi o asses raio. Keywords- cash conversion cycle, number of days invenory holding, number of days receivable accouns, number of days payable accouns, gross operaional profi JEL Classificaion- G30, G32 Ciaion: Ebrahim Abbasi and Said Ali Hashemi osra (202) The Effec of he Cash Conversion Cycle on Profiabiliy in Tehran Sock Exchange., ISSN: X & E-ISSN: , Volume, Issue, pp Copyrigh: Copyrigh 202 Ebrahim Abbasi and Said Ali Hashemi osra. This is an open- access aricle disribued under he erms of he Creaive Commons Aribuion License, which permis unresriced use, disribuion, and reproducion in any medium, provided he original auhor and source are credied. Inroducion Working capial managemen is effeced in 2 facors. Firs, inernal facors which includes invesmens coss, shor- erm financing requiremens, value of credi sales in resul of receivable accouns, amoun of invenory holding, maerials and cash programming. Second exernal facors which includes invesmen opporuniies in marke, exisence of financing opporuniies from money and sock marke and measurer insiuions for cusomers credi risk deermining, regulaion erms and offering mehods of banking service [9].he purpose of his paper is o indicae he mos inernal facors ha are effecive in working capial on profiabiliy. Liquidiy is he main facor on profiabiliy in any company. one of he influenial facor in working capial managemen is shorening he cash conversion cycle (CCC). I can help he proecion of liquidiy power of firms hus, he purpose of his paper is inveaing he effec of cash conversion cycle s componens on he firms operaional gross profi o asses raio. The paper is srucured as follows, firs we provide heoreical basics hen assumpions and mehodology and we prepare regression es of every five model. finally he las secion discusses he findings of he his paper wih suggesions. Review on Theoreical asics and Earlier Researches In financial and accouning opics cash conversion cycle (CCC) is equal wih he average number of days invenory holding and number of days receivable accouns, if we subrac number of days payable accouns from hose, he ne CCC per day being achieved. he lower his number means he process of purchasing, producing, sorage and selling goods unil he cash collecion is going o be shorer or he period of payable accouns is going o be higher. so working capial of firms will be increase as well as he cash flow. hus, reducing his circulaion and increasing liquidiy power is suiable for working capial managemen []. In anoher word, CCC represen he number of days which during hose days cash money ISSN: X & E-ISSN: , Volume, Issue, 202 ioinfo Publicaions

2 The Effec of he Cash Conversion Cycle on Profiabiliy in Tehran Sock Exchange will pay for goods and maerial and hen hrough credis ransfer o receivable accouns and again converse o cash [20]. having invenory is for replacing flucuaion of goods delivery and prevening from running ou of i unimely. lower in goods circulaion means higher invesmen in invenories. Sorage more han needed cause s financial blockage in non- producive maerials. The firm s purpose is o keep he invenories level in suiable amoun [22].he period of receivable accouns shows he firm s abiliy in receiving funds resul of credi sales. This period influenced by firm s credi policy. If hey give more ime o heir cusomers for paying deb, hen he number of days for receivable accouns will be increased. One of he oher componens of working managemen is payable accouns. This mehod is coun as a cheap way for financing. number of days for payable accouns uses for wo reason, firs for cash budgeing and second one for comparing i wih he ime given by sellers of raw maerial and goods supplier for heir receivable accouns collecion [2]. CCC is one of he crierions for working capial evaluaion. i is he ime needed beween maerials purchasing, producion process and funds collecion due o selling. The longer of his ime, he bigger invesmen in working capial should CCC ime be longer. I migh raise firm s profiabiliy hrough more selling. neverheless if invesmen cos in working capial be more han he benefis of invesor s invesmen or business credi rewarding, aferwards he firm s profiabiliy migh be reduced[7].in ne CCC crierion, we consider he lengh and he ime we receive he receivable accouns and payable accouns period, and also he lengh of sorage and he amoun of hose are no be noed. If wo firms have he same CCC bu receivable accouns for one be 90% and he oher one be 50% sum of receivable accouns and invenories hen he one wih higher rae has a beer liquidiy condiion, whereas his subjec isn considered in CCC []. Resul in Shin and Soenen [23] researches showed ha here is a reverse relaionship beween CCC and corporaes profiabiliy. Wang [26] analyzed he daa of Japanese and Taiwaneze firms for he period of he He found ha shorer CCC is relaed wih beer corporae s performance. Anand and Gupa [3] used CCC and working capial urnover as crierion for evaluaing performance of working capial managemen. Their resul showed, hese crierions are useful for evaluaing as well as helping in analyzing he risk and reurn of he firms. Research in CCC done by Deloof [7] which ook CCC, number of day s receivable accouns and payable accouns and invenory holding period as working capial managemen s crierions and gross operaing income as profiabiliy crierion. The resul showed ha here is a nifican negaive relaionship beween CCC and is componens wih gross operaing income. Elgelly s [8] research showed ha CCC has an imporan crierion in firm s profiabiliy compare o curren raio. His research showed ha here is a reverse and nifican relaion beween profiabiliy and liquidiy. Laplan s research [2] indicaed ha firm s size and fuure sale s growh have influenced on efficiency of working capial managemen. His research also concluded ha over invesmen in working capial can reduce firm s value. Resul of Padachi s research [8] showed ha over invesmen in invenory and receivable accouns is associaed wih lower profiabiliy. Lazaridis and Tryfonidis [3] research in Greece showed ha here is saisical negaive nificance relaion beween CCC and firm s profiabiliy. They undersood ha managers can creae higher profis for heir companies by holding CCC and is componen such as receivable accouns, payable accouns and invenory holding period in appropriae level. Reheman and Nasr [9] did a research in Pakisan in which hey confirm he negaive relaionship beween CCC and is componens wih profiabiliy. They also concluded ha here is a reverse and nifican relaion beween firm s liquidiy and deb wih profiabiliy. u hey confirmed on having a posiive and nifican relaion beween firm s size and profiabiliy. Garcia Truel and Solano [0] have also confirmed he reverse and nifican relaionship beween profiabiliy wih he period of receivable accouns, payable accouns and invenories holding period. hus, companies can reduce heir CCC in order o increase heir profiabiliy. Singh and Pandie s research [24] showed he negaive effec beween profiabiliy and working capial in idian s indusrial companies. Dash and Ravipai [6] presened a model on resource allocaion beween working capial,curren and fixed asses based on he size of working capial and rae of reurn on asses o achive an appropriae level of liquidiy and profiabiliy. Nobanee and Al hajjar [7] showed ha managers can increase he firm s profiabiliy by lengh of CCC and reducing he period of receivable accouns collecion and sorage. Alhough, hey can increase heir firm s profiabiliy by paying he deb in a longer period of ime bu in long runs is going o be ruin he firm s credi repuaion and is profiabiliy. Anoher research done by Nobanee [5] showed ha by shorening CCC, i can damage firm s operaion and reduce is profi. Chaerjee [5] resuled negaive relaionship beween CCC s componens wih profiabiliy and posiive relaionship beween firm s size and profiabiliy in riish companies. Nobanee e al [6] resuls shows here s a srong negaive relaion beween profiabiliy and CCC, excep in serving companies. Akgun and Melem s research [2] showed ha one of he effecive ways for shorening CCC is o shoren he period of receivable accouns, delaying he paymen of payable accouns and invenories. Caballero e al [4] sudied he effecive facors on CCC in small and medium firms. These firms ried o shoren his period and his cycle is longer for older firms. Rezazade and Heidarian [20] researches in Iran showed ha by shorening CCC. i would improve he profiabiliy. in addiion by reducing he days of sorage and collecing receivable accouns, we can creae values for firms. Torghe s [25] research confirmed ha here is a reverse relaion beween profiabiliy wih CCC, duraion of receivables accouns and invenories. bu here is a posiive relaionship beween profiabiliy and duraion of payable accouns. Hypohesis Each componen of CCC (business operaions period) wih 2 oher facors are effecive on profiabiliy. The ne CCC wih 2 oher facors is effecive on profiabiliy. Number of days invenory wih2 oher facors are effecive on profiabiliy. Number of days receivable accouns wih2 oher facors are effecive on profiabiliy. Number of days payable accouns wih2 oher facors are effecive on profiabiliy. Research Mehodology The saisics populaion for his research are repored from all manufacuring and nonfinancial companies which are lised in Teh- ISSN: X & E-ISSN: , Volume, Issue, 202 ioinfo Publicaions 2

3 Ebrahim Abbasi and Said Ali Hashemi osra ran sock exchange for he period of companies ou of 4 manufacuring firms are seleced o sudy on hem in his mehod: I. Have access o heir informaion on his period. II. Sock ransacion of he companies hasn been inerruped. III. Their financial year is ended on March 20. IV. No belong o invesmen and financial iermediaion group. These daa are colleced from sock exchange organizaion websie, annual financial saemens of companies which have published by Tehran sock exchange such as Dena, Rah AvardeNovin, Tadbir Pardaz, we used SPSS and EVIEWS sofwares. in his research, gross operaion profi (GP) is used as dependen variable and is obained from gross profi margin o oal asses.ne CCC is equal o he number of days receivable accouns (R/A) plus number of days invenory (INV) minus number of days payable accouns (P/A).Duraion of invenories (INV) means he average ime in which you sore he goods unil selling sage. Duraion of R/A means he ime in which you collec receivable accouns. Duraion of P/A means he ime you pay he payables accouns which mean he rade debs is being paid []. The 2 oher facors are: I. Fixed financial asses raio (Fixed FA): hese asses represen invesmens in any ype of long- erm banking accouns, paricipaion noes, long- erm invesmen in company s shares, and long- erms receivable accouns. This raio is calculaed from fixed financial asses divided o oal asses. II. Financial deb raio (Fin Deb): i s obained dividing shor and long erm loans o oal asses. III. Firm s size (Ln Sales): i s calculaed by logarihm of ne sales revenue. IV. Sales Growh: i s calculaed from differences of curren and previous year sales divided o previous year sales. V. Since 2 sample companies were included in 8 indusries. so for he measuremen of indusry influences is used eigh dummy variables such as manufacuring machinery, meal producs, pharmaceuical producs, Auomobiles companies, food companies excep ones wih sugar added, perochemical and chemical companies, cemen and basic meals. Our research is used correlaion and run wih 5 regression models. In all hese models, we considered he effec of 2 independen variables separaely. This means he effec of 2 independen variables in 5 regression models has been conrolled. In each model, we esed he effec on gross operaion profi by enering each of componens of ne CCC. Correlaion Tes Undersanding of inensiy and relaionship beween variables models, correlaion marix is used before doing he regression model. H0: There isn any correlaion beween model s variables. H: There is correlaion beween model s variables. According o able, mos of variables have nifican correlaion wih each oher. However in some of hose he relaionship isn nifican. racke s amoun shows he nifican level of coefficiens. [See Table ] Exisence of Linear Relaionship Tes eween Dependen and Independen Variables This es is done by analyzing of variance and regression model [4]. H0: There isn any linear relaionship beween variables. H: There is any linear relaionship beween variables. y considering o he nifican level in able 2 is less han 5%,we can assume ha here is a linear relaionship. Table 2- Analyze of Variance Model Sum of Df Mean F Sig Squares Square Regression 79095/ /532 75/23 0/000 Residual 97/ /37 Toal 9066/ Normaliy Tes of s One of regression s assumpions akes he residual error wih normal disribuion as mean equal o zero. Graph show ha he mean of residual errors is zero and he sandard deviaion nearly he same.so i will confirm he above assumpion. Graph - Regression Sandardized Residual Normaliy Tes of Daa Kolmogorov- smirnov es is used o indicae he normaliy of daa. H0: daa disribuion is normal. H: daa disribuion isn normal. According on able 3, nifican level is more han 5%, so wih95% confidence we can say daa has been normally disribued. Normal Parameers (a,b) Table 3- One Sample K-S Tes N (number of sample) Sandardized Residual 344 Mean 0000 Sd. Deviaion Mos Exreme Differences Absolue Posiive Negaive Kolmogorov- Smirnov Z.86 Asymp. Sig. (2- ailed) 0.2 Randomic Tes of Residuals Anoher assumpion in linear regression is independence of residuals from he ohers.for his purpose,we used Durbin- Wason es. ISSN: X & E-ISSN: , Volume, Issue, 202 ioinfo Publicaions 3

4 The Effec of he Cash Conversion Cycle on Profiabiliy in Tehran Sock Exchange H0:.5<D.W<2.5 H:D.W<.5 or D.W>2.5 According o able 4, D.W is equal o/92, so here isn any auo correlaion in residuals. Table 4 Model Summary D.W Sd.s of Esimae Adjused R Square R2 R /92 0/ /408 0/44 0/643 Muli Collineariy Tes Collineariy is a siuaion which shows if any of independen variables are linear funcions of oher independen variables or no. For doing his we ve used VIF and Tolerance ess and also condiion index. Table 5 shows he resuls of muli collineariy es wih VIF and Tolerance saisic. since VIF saisic is less han 5 and abou,so here isn any muli collineariy beween independen variables or can be olerable. in addiion Tolerance saisic are so close o,so here isn muli collineariy again. Table 6 shows condiion index and variance raios for he muli collineariy es. whereas condiion index less han 5 hen he assumpion of lack of collineariy beween independen variables are confirmed [See Table 6] [4]. The Firs Hypohesis Tes In he firs model, componens of CCC wih oher 2 independen variables enered ino regression model. hese variables are: ne CCC, number of days invenory, number of days receivable accouns, number of days payable accouns, Fixed Fa raio, Fin Deb raio, sales growh rae, logarihm of sales wih 8 oher dummy variables which are he indicaor of 8 indusry. Resuls of coefficien s effec es of hose variables are shown in able 7. Table 7 Regression Tes in he Firs Model Variables Unsandardizied Sd. ea (Consan) 27/735 / /675 Fin Deb /66 - / P/A - /009 / / R/A - /0037 / / D3 /838 /067 /034 /093 D6 0/448 /098 /029 0/646 D7 3/28 /407 /0283 9/439 D5 7/659 /060 /090 7/224 Sales growh 3/589 /0800 /009 4/488 Fixed FA /739 - / / D4 2/973 /0949 /0087 3/33 /0002 Ccc /0023 /0746 /0456 Inv /0020 /0700 /0484 Ln sales - / /0232 /087 D - / /0802 /0423 D2 - / /085 /0854 D8 /0028 /037 /0300 The firs model of regression s equaion is as below: Gross operaing profi = 27/735-0/345 fixed FA- 9/66 Fin Deb- 0/09 P/A- 0/037 R/A +3/589 sales growh +/838D3+ 2/973D4+7/659D5+0/448D6 +3/28D7 of firs model shows ha Fixed Fa raio, Fin Deb raio, Number of days accoun payable and Number of days receivable accouns have a negaive influence on gross operaing profi. The ne CCC s coefficien, Number of day s invenory, Ln sales and D, D2, D8 as dummy variable weren nifican. of dummy variables D3, D4, D5, D6, D7 and sales growh have posiive influence on gross operaing profi. since 0 ou of 6 independen variables have nifican effec on GP. Thus, oher variables are removed from model and examinaions of linear regression is done base on effeciveness of variables on GP. The Second Hypohesis Tes In he second model, jus ne CCC wih 2 oher variables are enered in order o examine heir influences on GP (Gross operaing Profi). able 8 shows coefficiens and nifican level of each variables. Table 8 Regression Tes in he Second Model Variables Unsandardizied Sd. ea (consan) 23/284 / /790 Fin Deb /62 - / D7 4/447 /392 /0303 0/379 D6 9/568 /0950 /0263 0/068 D3 9/84 /099 /0257 9/932 Sales growh 5/4 /0837 /055 6/3 D5 6/489 /076 /059 6/030 CCC - /0007 / /007 - / Fixed FA /946 - / / Ln sales /006 /63 /0528 D - / /944 /0345 D2 - / / D4 /0046 /630 /003 D8 /00 /0399 /0690 Gross Operaing Profi = 23/284-7/76 Fixed Fa- 7/835Fin Deb- 0/007CCC +5/4Sales Growh +9/84D3+ 6/489D5+ 9/568D6 +4/447D7 Resuls showed ha coefficiens of Ln sales and dummy variables (D, D2, D4, D8) weren nifican. of Fixed FA raio, ne CCC, Fin Deb raio are negaive and nifican. On he oher hand, (D3, D5, D6, D7) as coefficiens of dummy variables and sales growh are posiive and nifican. The Third Hypohesis Tes In he hird model, beween componens of CCC jus he number of days invenory wih 2 oher variables enered o he regression in order o examine he influences of hese variables on GP. able 9 shows coefficiens of each variables. According o able 9, coefficiens of Ln sales and D, D2, D4, D8 are no nifican. of Fixed FA raio, number of day s invenory and Fin Deb raio are negaive an d nifican. On he oher hand, coefficiens of dummy variables (D3, D5, D6, and D7) and sales growh are posiive and nifican. Thus, number of day s invenory as a componen of CCC has negaive nifican ISSN: X & E-ISSN: , Volume, Issue, 202 ioinfo Publicaions 4

5 Ebrahim Abbasi and Said Ali Hashemi osra impac on GP. The Fourh Hypohesis Tes In his model, beween componens of CCC, jus numbers of day s receivable accouns wih 2 variables are enered o he regression o examine he effec of hese variables on GP. Table 9 Regression Tes in he Third Model Variables Unsandardizied Sd. ea (consan) 24/60 /086 22/257 Fin Deb /7 - / D7 4/7 /389 /0309 0/593 D6 9/457 /0975 /0260 9/70 D3 9/0 /0984 /0240 9/257 /0.000 D5 6/39 /094 /05 5/63 Sales growh 5/48 /0.82 /056 6/268 Inv - /0009 / / / Fixed FA /889 - / / Ln sales /005 /0595 /0552 D - / /098 /0359 D2 - / / D4 /005 /789 /0074 D8 /002 /0455 /0649 Gross operaing profi = 24/60-9/002 Fixed FA- 8/502 Fin Deb- 0/009 INV +5/48 Sales Growh+9/0 D3+6/39 D5+9/457 D6+4/7 D7 Table 0 Regression es in he Fourh Model Variables Unsandardizied Sd. ea (consan) 26/062 /098 28/375 Fin Deb /22 - / R/A - /0048 / / D3 2/852 /064 /0337 2/076 D6 0/773 /0984 /0297 0/947 D7 3/72 /42 /0278 9/270 D5 8/069 /073 /098 7/52 Sales growh 3/756 /0805 /04 4/667 D4 2/543 /0953 /0074 2/668 /0008 fixed FA /792 - / / Ln sales - / /072 /0863 D - / /0847 /0397 D2 /0006 /022 /0832 D8 /0020 /079 /0472 Gross operaing profi = 26/062-9/43 Fixed FA- 8/206 Fin Deb- 0/048 R/A+3/756 Sales Growh+2/852 D3+2/543 D4+8/069 D5+0/773 D6+3/72 D7 According o able 0, coefficiens of dummy variables (D, D2, D8) and ln sales are no saisically nifican. Fixed FA raio, number of day s receivable accouns and Fin Deb raio are negaive and nifican effecs. Oher dummy coefficiens of independen variables such as (D3, D4, D5, D6, D7) and sales growh represen posiive and nifican effec on GP raio. The Fifh Hypohesis Tes In he fifh model, we used he same variables excep he one of accouns receivables which we replace wih payable accouns o observe he effecs of hese variables on gross operaing profi. Table shows he each variable s coefficiens. According o he able, coefficiens of dummy variables D, D2, D8 and Ln sales are no nifican. coefficiens of Fin Deb raio, number of days payable accouns and Fixed FA raio have negaive and nifican impac. of D3, D4, D5, D6, D7 and sales growh have posiive effecs. Table Regression Tes in he Fifh Model Variables Unsandardizied Sd. ea (consan) 24/809 / /48 Fin Deb /65 - / P/A - /0026 / / D7 4/650 /428 /0307 0/260 D6 9/54 /007 /0262 9/475 D3 9/392 /04 /0246 9/08 Sale growh 5/300 /0796 /060 6/66 D5 7/9 /092 /076 6/586 Fixed FA /824 - / /007 D4 2/075 /0964 /0060 2/53 /0032 Ln sales /006 /0643 /0520 D - /00 - /0370 /072 D2 - / / D8 /0046 /660 /0097 Gross operaing profi = 24/809-9/48 Fixed FA- 9/907 Fin Deb- /0026 P/A +5/300 Sales Growh+9/392 D3+2/075 D4+7/9 D5+9/54 D6+4/650 D7 Discussion and Conclusions In his research he effec of each componens of working capial wih 2 conrol variables on firm's GP in five models were sudied. hese componens consiss of: CCC, number of days invenory, number of days receivable accouns and number of days payable accouns. in he firs model when hese four componens wih 2 oher conrol variables have enered o regression, resuls showed ha ne CCC and number of days invenory, don' have nifican impac on GP raio. bu number of days receivables accouns and number of days payable accouns have negaive nifican impac on GP. This means ha if he number of day s payable accouns and receivable accouns increase, he gross operaing income will decrease. In he second model we inveaed he effec of ne CCC wih 2 oher conrol variables on GP. Resul showed ha ne CCC has negaive and nifican impac on GP. his means, as he ne CCC increase, GP raio will decrease. In hird model, we only replaced number of day s invenory insead of ne CCC. resuls showed ha number of days invenory has negaive and nifican effec on GP. This means ha by increasing he number of day s invenory, GP raio will decrease. In he fourh model we only replaced number of day s invenory ISSN: X & E-ISSN: , Volume, Issue, 202 ioinfo Publicaions 5

6 The Effec of he Cash Conversion Cycle on Profiabiliy in Tehran Sock Exchange wih number of day s accouns receivables. resul suggesed ha his period has negaive nifican effec on GP and showed managers can improve profiabiliy by reducing he credi period graned o heir cusomers he only differences in fifh model is he subsiuion of accouns receivables wih accouns payables. we observed ha number of days accouns payables has negaive influence on GP raio. he resul of his research are consisen wih findings of Deloof [7] in elgium, Lazaridis and Tryfonidis [3] in Greece, Reheman and Nasr [9] in Pakisan, Garcia and Solano [0] in spain,singh and pandey [24] in India, Nobanee and Al hajjar [7] in Japan, Chaerjee [5] in England, Rezazade and Heidarian [20],Torghe [25] in Iran.bu i s no accorded wih Torghe s findings [25] abou posiive relaionship beween he number of days accouns payable and profiabiliy. Suggesions In financial analyzing, invesmen and sock evaluaion, i should be considered no only GP, bu also companie s working capial and CCC. Companies should have consanly compare heir business operaion period such as: Number of days invenory, number of days payable accouns, number of day receivables s accouns wih heir indusry compeiors and find ou sraegies for reducing and adjusing hem. For more ransparency in he financial reporing sysem, companies should be required o repor heir working capial saus o sock exchange organizaion. Reducing he cash conversion period, companies can improve heir profiabiliy. [4] Momeni M. (200) Saisical Analysis Through SPSS, Third ed. [5] Nobanee H. (2009) SSRN. [6] Nobanee H., Abdullaif M., Al hajjar M. (200) SSRN. [7] Nobanee H., Al hajjar M. (2009) SSRN. [8] Padachi K. (2004) Inernaional Review of usiness Research Papers, 2(2) [9] Reheman A., Nasr M. (2007) Inernaional Review of usiness Research, 3. [20] Rezazade J., Heidarian J. (200) Accouning & Audiing Research Journal, 2(7), pp [2] Sabzevari A.M., Abdulazade F. (994) Financial Managemen,, second ed. [22] Shabahang R. (2000) Financial Managemen, 2. [23] Shin H.H., Soenen L. (998) Financial Pracice and Educaion, 8(2), [24] Singh J.P., Pandey S. (2008) Journal of Financial Economics, 6(4), [25] Torghe S. (2008) Inveaing he Effecion of Working Capial Managemen on SME s Iranian Firms, Maser Degree Disseraion, Al Zahra Universiy, Tehran, Iran. [26] Wang Y.J. (2002) Journal of Mulinaional Financial Managemen,2, References [] Akbari F. The Analysis of Financial Saemens, Tehran, Iran. [2] Akgun M., Melem G. (200) IUP Journal of Supply Chain Managemen, 7(&2). [3] Anand M., Gupa P.C. (2002) Managemen and Accouning Research, 30(3), [4] Caballero S., Gracia- Teruel P.J., Solano P. (200) Accouning & Finance, l50(3), [5] Chaerjee S. (200) SSRN. [6] Dash M., Ravipai R. (2009) SSRN. [7] Deloof M. (2003) Journal of usiness Finance & Accouning, 30(4), [8] Elgelly A. (2004) Inernaional Journal of Commerce and Managemen, 4(2), [9] Enayai S. (2004) Inveaing & Explaining he Working Capial Managemen of Lised Company in Tehran Sock Exchange, Maser Degree Disseraion, Shahid eheshi Universiy, Tehran, Iran. [0] Garcia- Teruel P.J., Solano P.M. (2007) Inernaional Journal of he Managerial Finance, 3, [] Khoramnejad M. (2008) The Analysis of Working Capial Managemen in Pharmaceuical Companies Lised in Tehran Sock Exchange, Maser Degree Disseraion, Ferdosi Universiy, Mashhad, Iran. [2] Laplan M. (2005) ICFAI Journal of Managemen Research, 6 (5) [3] Lazaridis I., Tryfonidis D. (2006) Journal of Financial Managemen and Analysis, 2 (), ISSN: X & E-ISSN: , Volume, Issue, 202 ioinfo Publicaions 6

7 Ebrahim Abbasi and Said Ali Hashemi osra Table - Correlaion Marix Pearson Correlaion G P Fixed Fa Fin Deb CCC R/A INV P/A Ln Sales Sales Growh G P 0/080 (0/008) - 0/430-0/70 0/233 0/23-0/64 0/0 (0/78) 0/20 Fixed Fa 0/080 (0/008) - 0/03 (0/677) - 0/59-0/86-0/5-0/087 (0/004) 0/ 0/026 (0/383) Fin Deb - 0/430-0/03 0/099 0/008-0/5-0/226 0/05-0/22 (0/677) (0/00) 0/783 CCC - 0/70-0/59 0/099 0/43 0/69-0/76-0/7-0/228 (0/00) R/A 0/233-0/86 0/008 0/43 0/74 0/295-0/08-0/85 0/783 INV 0/23-0/5-0/5 0/69 0/74 0/446-0/092-0/27 (0/002) P/A - 0/64-0/087-0/226-0/76 0/295 0/446-0/028-0/06 (0/004) (0/345) (0/582) Ln Sales 0/0 0/ 0/05-0/7-0/08-0/092-0/028 0/03 (0/78) (0/002) (0/345) (0/308) Sales Growh 0/20 0/026 (0/383) - 0/22-0/228-0/85-0/27-0/06 (0/582) 0/03 (0/308) Variables Table 5- Collineariy Tes Unsandardizied T Sig Collineariy Saisics Sd. ea Tolerance VIF (Consan) 27/735 0/967 28/675 0/000 Fin Deb / /000 0/893 /20 P/A 0 0/ /000 0/794 /259 D7 3/28 /407 0/283 9/439 0/000 0/63 /63 D6 0/448 0/98 0/29 0/646 0/000 0/738 /355 D3 /838 /067 0/34 /093 0/000 0/685 /460 R/A 0 0/ /000 0/77 /394 D5 7/659 /060 0/90 7/224 0/000 0/792 /262 Sales Growh 3/589 0/800 0/09 4/488 0/000 0/933 /072 D4 2/973 0/949 0/087 3/33 0/000 0/720 /390 Fixed Fa / /000 0/73 /370 Table 6- Collineariy Tes Variance Proporions Model Eigen Value Condiion Index Consan Fin Deb P/A R/A D6 D3 D7 D5 Sale Grow D4 Fixed Fa 4/290 /000 0/0 0/0 0/0 0/0 0/00 0/0 0/00 0/00 0/0 0/0 0/0 2 /343 /788 0/00 0/00 0/0 0/0 0/0 0/0 0/23 0/0 0/00 0/0 2/0 3 /043 2/029 0/00 0/0 0/0 0/00 0/0 0/ 0/00 0/09 0/02 0/3 00/0 4 /05 2/056 0/00 0/00 0/00 0/00 0/02 0/28 0/00 0/3 0/00 0/00 00/0 5 /003 2/068 0/00 0/00 0/00 0/00 0/44 0/02 0/00 0/4 0/00 0/02 00/0 6 0/748 2/395 0/00 0/0 0/02 0/02 0/00 0/0 0/00 0/0 0/77 0/02 00/0 7 0/565 2/757 0/00 0/38 0/25 0/0 0/00 0/00 0/02 0/02 0/00 0/04 00/0 8 0/43 3/54 0/00 0/ 0/05 0/00 0/08 0/04 0/20 0/08 0/03 0/0 54/0 9 0/303 3/760 0/00 0/0 0/20 0/0 0/ 0/5 0/39 0/6 0/02 0/3 30/0 0 0/78 4/907 0/00 0/09 0/24 0/78 0/ 0/3 0/00 0/06 0/05 0/08 02/0 0/08 7/300 0/99 0/28 0/2 0/7 0/2 0/07 0/4 0/3 0/09 0/ 0/0 ISSN: X & E-ISSN: , Volume, Issue, 202 ioinfo Publicaions 7