Investigating the Impact of Working Capital Management and Sales Growth on Profitability: Evidence from Companies Listed on the Tehran Stock Exchange

Abstract

This study examines the influence of working capital management and sales growth on the profitability of companies listed on the Tehran Stock Exchange from 2018 to 2022. Using panel data for 143 firms selected via systematic removal, the study employs a correlational and ex-post facto methodology. Data are analyzed using linear regression and the OLS method via EViews software. Descriptive statistics indicate moderate efficiency in working capital management, while hypothesis testing reveals a negative relationship between cash conversion cycles and profitability, highlighting the importance of liquidity optimization. Sales growth positively impacts profitability, suggesting revenue expansion is vital for financial performance. These findings underscore the necessity for managers to adopt effective strategies for managing liquidity and driving sustainable sales growth, ultimately contributing to firm competitiveness and stability in evolving market environments.