Investigation Of The Effect Of Working Capital And Cash Holdings On The Profitability Of Companies Listed In The Tehran Stock Exchange

Abstract

The present research aims to investigate the relationship between financial variables of working capital, Cash holdings, and profitability. In this research, the average collection period, average inventory turnover duration, average debt payment period, and free cash flow of the firm are independent variables, and the return on assets and return on capital are dependent variables. Also, Firm size and financial leverage are control variables. Regarding the research topic, Tehran Stock Exchange-listed enterprises make up the statistical population of the current study. 77 businesses were chosen as selected samples for this study. Companies listed on the Tehran Stock Exchange from the beginning of 2014 to the end of 2019 were used to compile data for this study. In this research, to test the hypothesis was used multiple regression analysis with the method of mixed data with fixed effects. Research results indicated that there is a significant relationship between working capital and cash holdings and return on assets. Also, there is a significant relationship between working capital and return on capital.