The effect of capital management on stock returns of accepted companies in Tehran Stock Exchange

Abstract

This study has investigated the impact of capital management on stock returns of accepted companies in Tehran Stock Exchange and the cash conversion cycle is used as a measure of working capital management because the most effective and efficient working capital management is equal to the reduction of cash conversion cycle. This research was conducted within the framework of deductive and by using statistical correlation methods, the relationship between cash conversion cycle and its components including accounts receivable collection period, goods inventory cycle period, accounts payable payment period, with stock returns about 112 companies were examined. The results showed that there is no significant relationship between accounts receivable collection period and stock returns, accounts payable payment period and stock return and also between cash conversion cycle with stock returns. But, there is a significant relationship between goods inventory cycle period and stock returns. Finally, we concluded that the efficient management of working capital did not have any influence on stock returns of accepted companies in Tehran Stock Exchange between the years 2002-2011.