Investigation of the Effect of Cash Conversion Cycle on the Profitability of Chain Markets Traded on Borsa Istanbul

Abstract

Purpose – Cash conversion cycle (CCC) in grocery chains are typically shorter than in many other industries. The purpose of this study is to investigate whether the turnover of chain markets, which has an important place in the food sector, is mainly realized in cash and whether this has an effect on their profitability. For this purpose, the effect of cash conversion cycles of chain markets traded on Borsa Istanbul on their profitability was examined.
Design/methodology/approach – In the study, panel data analysis was performed on data for the 9-year period between 2015 and 2023. In the analysis, return on assets (ROA) rate was used as the dependent variable and cash conversion cycle was used as the independent variable.
Results – According to the findings obtained as a result of the analysis, a statistically significant and negative relationship was determined between the CCC and active profitability of chain markets. The findings are consistent with the literature and expectations.
Discussion – Since there is no similar study on chain markets, it is thought that the study will contribute to the literature. In future studies, the reliability and validity of the analyses can be increased by increasing the number of chain markets in the sample, and more diverse studies can be conducted such as analyzing the effects of cash conversion cycle on return on equity, net profit margin and operating margin profitability, in addition to active profitability.