Abstract
Article history: Received December 28, 2013 Accepted 10 April 2014 Available online April 17 2014 This paper studies the effects of cash conversion cycle (CCC) and size of selected firms listed on Tehran Stock Exchange (TSE) on four variables including return of assets, return of equities, tangible assets and equity multiplier. The study selects a sample of 105 firms listed on TSE and divides them into two groups of big and small sized companies over the period 2008-2012. Using a regression analysis, the study confirmed a meaningful relationship between different variables. In other words, in our survey, CCC and size negatively influence on tangible assets, they positively influence on equity multiplier as well as ROA but the effects of CCC and size on ROE for small and big firms are mixed. © 2014 Growing Science Ltd. All rights reserved.
Highlights
Cash rotation starts when a firm turns cash to pay for raw materials and continues until it re-charges from the sale of goods
The research objective was to assess the relationships between assets, return on assets, return on equity and equity multiplier with the cash conversion cycle in large and small corporations
The dependent variables used in this research included the assets objectivity, return on assets, return on equity, and company’s equity multiplier; the cash conversion cycle, and small and large companies were taken as independent variables
Summary
Cash rotation starts when a firm turns cash to pay for raw materials and continues until it re-charges from the sale of goods. Production involves the implementation of cash when firms first purchase raw materials to produce products, and transform them into commodities. Assets objectivity can be regarded as a capital backing for the company and this must always be kept in mind that a firm's management tries to maximize return on assets, return on equity, and equity multiplier of the company. In this context, cycle cash and high-speed cash conversion can account for the greatest factors influencing the return on assets and return on equity
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