Working Capital Management

Objectives: This research aims to investigate the relationship between family firms and working capital management. Working capital management involves the management of current assets and liabilities to achieve a balance that maximizes shareholder returns on investments. Methodology/Design/Approach: This applied study employs a causal correlational methodology. The statistical population consists of all firms listed on the Tehran Stock Exchange. Using systematic elimination sampling, 136 firms were selected as the research sample and analyzed over a ten-year period from 2014 to 2023. Findings: The results indicate an inverse relationship between family firms and the cash conversion cycle. Additionally, there is a direct relationship between family firms and the period for collecting receivables. Furthermore, a direct relationship exists between family firms and the inventory turnover period, while an inverse relationship is observed between family firms and the period for debt repayment. Innovation: This research contributes to the existing literature by providing insights into how family ownership influences working capital management practices. It highlights the unique dynamics of family firms in managing their operating cycles compared to non-family firms, offering practical implications for stakeholders in understanding how ownership structure can affect financial performance.

Objectives: This research aims to investigate the impact of working capital management on the profitability of firms, emphasizing the moderating role of defensive and offensive business strategies. Effective management of working capital is essential for the survival of firms, as it reflects the efficient use of short-term capital and serves as a crucial measure of liquidity. Methodology/Design/Approach: This applied study employs a causal correlational methodology (post-event). The statistical population comprises all firms listed on the Tehran Stock Exchange. Due to specific constraints, a total of 135 firms were selected through systematic elimination sampling and analyzed over a ten-year period from 2014 to 2023. Finding: The results indicate that aggressive business strategies significantly moderate the relationship between working capital management and firm profitability, whereas defensive strategies do not exhibit a notable effect on this relationship. Innovation: This research contributes to the understanding of how business strategies influence the relationship between working capital management and profitability. It provides actionable recommendations for firms to adopt aggressive strategies to enhance overall performance. Furthermore, given the unstable economic environment in the country, it is suggested that firms develop strategic plans to improve their responsiveness to threats and capitalize on emerging opportunities. Keywords: Working Capital Management, Profitability, Defensive and Offensive Business Strategy.