Abstract:

The aim of this study is to investigate effects of working capital components over profitability by financial ratios. The scope of the research consists of 24 business in chemicals, petroleum, rubber and plastic products sector in Borsa İstanbul with consistent data between the period of 2009 and 2015. Independent variables used in the study are account receivables period, inventory conversion period, account payable period, cash conversion cycle and current ratio. Dependent variables are return on assets and return on equity. According to correlation results of the study; while return on equity variable has negative correlation with the inventory conversion period, account receivables period and account payable period, it has positive correlation with cash conversion cycle, current ratio, return on assets. While return on assets variable has positive correlation with inventory conversion period, cash conversion cycle and current ratio, it has negative correlation with account payable period and account receivables period. Two different models has been identified by using random effect method which included return on assets and return on equity variables. According to obtained results; inventory conversion period, account receivables period, account payable period, cash conversion cycle and current ratio variables have no statistically significant effect over the dependent variables

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