The Effect of Working Capital Management on the Decisions of Financial Provision and Profitability

This study examines the correlation between working capital management and debit structure of the firms and the effect of this correlation on the firms' profitability. If cash flow is the preferred source for financial provision of investments in the projects, it mediates the structure and combination of working capital. The cross-sectional data was in the form of time series, collected from 112 listed firms in Tehran Stock Exchange from 2009-2003. Panel data method and ANOVA estimator were used for model evaluation. Results showed a significant correlation between financial provision decisions and working capital management. Also, financial provision decisions and working capital management have a positive effect on profitability